H2Carrier emerges in Norway
At last month’s ONS conference 2022 in Stavanger, Norway, startup H2Carrier made an announcement which represents a milestone for not only them but the entire energy industry. Following considerable work undertaken by H2Carrier and partners, their P2XFloater™ concept has received AiP (Approval in Principle) from DNV.
For those not familiar with the maritime or offshore industries, this announcement may not hold great significance, so it needs to be broken down.
The role of Classification Societies
The press release from H2Carrier includes a quote from Conn Fagan, DNV Vice President, Business Development for Floating Production, which puts the AiP announcement into a nutshell:
The AiP covers all aspects of the integrated vessel concept including structural integrity, mooring, ammonia production, ammonia storage and cargo handling. The AiP assessment has looked at the technical challenges associated with offshore ammonia production and has concluded that there are no insurmountable difficulties to preclude future classification of the design.From H2Carrier’s official press release, 30 Aug 2022
DNV are one of the world’s leading Classification Societies who, along the rest of their cohort such as Lloyd’s Register or Bureau Veritas, lay out standards for verification and certification within many industries, not least maritime and offshore. The systematic validation that Classification Societies provide enables business confidence for investors, satisfies regulators and underlies maritime insurance. In offshore and maritime circles, they exist at the nexus of all future opportunities.
“Floaters” at work
DNV has a Floating Production department simply because, out of sight and mind to most of us but often intrinsic to offshore hydrocarbon fields, there are “Floaters” at work. Floaters come in many shapes and sizes. For example, some are FSO (Floating Storage and Offloading) vessels which are connected by pipe and continually load hydrocarbons from seabed-fixed or floating production platforms. When enough product quantity is accumulated, they offload to visiting export tankers. Petrol or diesel in your car right now may well have started its journey from the well as crude oil stored in an FSO.
A league above FSO is the FPSO (Floating Production Storage and Offloading) vessel. These, as the name suggests, include the production element. In hydrocarbon settings, they take the raw oil from the well and “produce” it into crude oil which they store and offload in a similar manner as an FSO. Besides these two types of Floaters there are many variations on the theme, depending upon the expected life of the oil field, its specific production requirements, proximity to shore infrastructure and many other factors.
Beginnings in the oil industry
The Floater concept is said to have started where the case for starting or prolonging the extraction life of marginal offshore oil fields was explored, in relation to fluctuations of the oil market prices. It was suggested that an oil production installation could be put on top of an old (reasonably priced) oil tanker which could be located at a marginal oil field to facilitate extraction and export. Thereafter, there could even be a possibility to relocate the FPSO to another such field.
Since the early days the value proposition has greatly enlarged, the market has grown and now FPSO hulls are often newbuilds. As the offshore oil industry has depleted shallower water, technology has been found to develop reservoirs at greater depths. Apart from depth, reservoirs exist far offshore where the laying of long pipe infrastructure can be extremely expensive or technologically infeasible. In most offshore opportunities, the case for the FPSO and other floating assets is therefore evaluated as a matter of course.
However, among the other perhaps less obvious drivers for Floater employment is the critical element of onshore options. Even if an oil field is situated in relatively shallow water and close to shore, is the best option to build production and storage infrastructure ashore? The answer would often seem to be no, the better option is to float these offshore instead. The approval process for such assets ashore can be fraught with difficulties, including public objection. Besides, the national export of such resources often requires transfer to tanker vessels which obviously demand some marine infrastructure anyway.
FPSO assets are sometimes owned and operated by national or private oil majors, but are usually sub-contracted by FPSO specialists who sign contracts with the field operator to supply and operate the asset. According to Bloomberg analysis from earlier this year, the FPSO market was worth US$11.91 billion in 2021 and will be worth USD 21.83 Bn by 2028.
A future for Floating Power-to-X?
Meanwhile, we are rolling forward with a new energy future and the advent of low carbon Power-to-X fuels such as ammonia. For some time there have been discussions in corners of the renewable offshore energy industry around the case for employment of Floaters here as well. In some locations, when evaluating the design case for the production and storage of Power-to-X fuels, floating a co-located solution is very attractive, particularly given the highly developed and proven record for this type of asset in the offshore hydrocarbons industry. Now, H2Carrier has planted this flag.
It is no coincidence that the first announcement of this type has occurred in Norway, by a Norwegian company, and with a Norwegian Classification society. Norway hosts a highly progressive maritime and offshore technology industry, one of the world’s oil majors and is dedicated to an aggressive national decarbonization strategy. This project also includes a regional like-minded partner and sits in a fertile funding and business environment for this type of opportunity.
Looking at some possible deployment scenarios, H2Carrier’s concept has a definite role where the nature of renewable electricity generation for a Power-to-X project is one or a combination of:
- A long way from national grids and presenting logistical or terrestrial difficulty for construction of shoreside plant,
- Far offshore and necessitates long cable infrastructure with high cost and power losses,
- Considered surplus or otherwise designated for foreign export with no case for cable connection, or
- Earmarked to produce fuel for hard to abate sectors, particularly maritime.
The case for the generation, storage and offloading of hydrogen and/or ammonia may vary somewhat with the deployment scenarios.
Whatever the use case variables, H2Carrier wants to be an enabler for the development of renewable energy which would otherwise not be feasible due to lack of infrastructure, releasing the so called “trapped” or “non-commercial” resources.
H2Carrier had hinted at another milestone announcement in the pipeline. This materialized in quickstep on 6 September, just a week after the AiP announcement. H2Carrier has entered into a MoU with Statkraft (Europe’s largest producer of renewable energy) to study the possible use of their P2XFloater™ at certain offshore wind locations. Technological assistance will be provided by Technip Energies subsidiary KANFA: an organisation with extensive experience in the offshore production and installation industry. The pieces of the puzzle seem to fit and we should watch out for more news.
Other floating production announcements
Also at Ammonia Energy this year, we’ve seen announcements from:
- Hyundai Heavy Industries and the American Bureau of Shipping, who are jointly developing an offshore renewable hydrogen production platform.
- Enterprise Energy, who are developing a “one-stop shop” marine platform for electricity, hydrogen and ammonia production with German engineering firm Tractebel Overdick.
- And a tie-up between Samsung Heavy Industries (SHI) and Seaborg, who are developing floating nuclear power plants to power hydrogen & ammonia production wherever they are moored.