Sinopec's Parent Company to Build China's First Long-Distance Pipeline

China: China's largest oil refiner and fuel supplier, China Petrochemical Corp, has announced plans to construct the country's first long-distance Hydrogen pipeline, which forms part of the national fuel transmission network development blueprint. The "west-to-east" demonstration pipeline, spanning over 400km, aims to boost China's energy transition efforts by replacing the fossil fuel-based Hydrogen production in the Beijing-Tianjin-Hebei region.

It will also cater to the growing Hydrogen demand in the transport sector and address the nation's green Hydrogen supply-demand imbalance. The pipeline's transmission capacity, initially set at 100,000 tonnes, could be increased to 500,000 tonnes, with multiple connection points for potential sources of Hydrogen. Once completed, this will be the first cross-regional and large-scale transmission pipeline for pure Hydrogen in the country.

China Petrochemical announced that the pipeline and its projected sub-branches will play a crucial role in decarbonizing the densely populated area it will serve, home to 110 million people with the annual economic output is 10 trillion yuan, which is equivalent to US$1.45 trillion. Beijing has set an ambitious goal of having renewable energy contribute 14% of the capital city's energy consumption by 2025 and green electricity imports doubled from 2020 to help China reach peak carbon emissions by 2030 and become carbon neutral by 2060.

China Petrochemical reported that the pipeline's routing, technical study, and construction design are progressing well, with the feasibility study report "essentially complete." The company did not disclose details regarding the construction time frame, investment, and returns. The pipeline is expected to significantly decrease the transport cost of Hydrogen, which is currently the biggest obstacle to the development of green Hydrogen in China.

China Petrochemical plans to tackle the issue of efficient green Hydrogen delivery from Inner Mongolia and western China to eastern consumption centres through a large-scale green Hydrogen project in Ulanqab.

The project will be powered by solar and wind farms, marking a significant step towards clean Hydrogen production. While trucking remains the primary method of long-distance Hydrogen transportation, it is costly and inefficient. China Petrochemical's ambitious goal is to produce over one million tonnes of Hydrogen per year and have an annual Hydrogen refuelling capacity of 120,000 tonnes by 2025. However, no specifics have been provided regarding the target output of green Hydrogen.

Last year, China introduced its first Hydrogen strategy that aims to reach a target of having a minimum of 50,000 Hydrogen fuel-cell electric vehicles in operation. By 2025, the yearly production of green hydrogen is expected to reach between 100,000 and 200,000 tonnes. However, in 2020, Hydrogen production in China amounted to approximately 33 million tonnes, with coal accounting for two-thirds and generating roughly 360 million tonnes of carbon dioxide emissions, according to the International Energy Agency.

Additionally, the China National Coal Association reported that "blue Hydrogen" from natural gas made up 19% of the total, while "green Hydrogen" accounted for only 1% of the total due to high costs. Although natural gas has around half the carbon footprint of coal, the high costs of green Hydrogen remain a challenge in China.