Shell scraps blue hydrogen project plans following refocus on oil and gas business

(Bloomberg) – Shell Plc’s Norwegian unit won’t pursue a project that would have used natural gas from its Nyhamna processing facility to make blue hydrogen due to a lack of demand.

Having assessed its feasibility, Shell is shelving the project, company spokesman Jan Soppeland said Tuesday. That follows Friday’s announcement by Equinor ASA — Norway’s biggest oil and gas company — that it’s scrapping plans to develop a pipeline to transport hydrogen to Germany due to a lack of customers, supply and an adequate regulatory framework.

The Norwegian government has been keen to develop projects for producing blue hydrogen — made from fossil fuels but paired with carbon capture and storage — to bolster the country’s oil and gas sector. Still, hydrogen in all its forms faces regulatory and cost uncertainties, with consultancy McKinsey cutting its forecast for 2050 global demand by 25%.

Energi og Klima, an online news site for the Norwegian Climate Foundation, reported Shell’s plans to shelve the blue hydrogen project earlier on Tuesday.