Lind invests $2 billion to develop Canada’s largest clean hydrogen production base

2024-08-28

Industrial gas company Linde announced that after signing a binding clean hydrogen supply agreement with a US company, it will invest over $2 billion to build, own, and operate a blue hydrogen production and air separation complex for chemical giant Dow Chemical in Alberta, Canada.

Dow signed a framework agreement with Linde last year to supply hydrogen and nitrogen for its Path2Zero chemical project in Saskatchewan, which made its final investment decision (FID) in November 2023 and may accommodate the Linde plant.

The chemical plant will use clean hydrogen as high-temperature heating fuel to produce ethylene, which is a component of the world’s most commonly used plastic polyethylene. It will also utilize carbon capture infrastructure to reduce the plant’s Scope 1 and 2 emissions to “net zero”.

Today, Linde and Dow jointly announced FID, confirming the framework transaction as a long-term purchase agreement.

This industrial gas company claims that its Blue Hydrogen project, once put into operation in 2028, will become Canada’s largest clean hydrogen complex.

Its competitor Air Products has scheduled to launch its net zero hydrogen complex in Edmonton, the capital of Alberta, Canada this year, with an expected daily production of 1500 tons of blue hydrogen, or approximately 547500 tons per year.

However, Lind did not provide an exact figure on how much hydrogen will be produced by the project, which will use self heating reforming and carbon capture equipment to avoid over 2 million tons of carbon dioxide emissions annually.

Dow plans to produce an additional 2 million tons of ethylene annually through its Path2Zero project by 2029, in addition to converting the existing 1.3 million tons of annual production capacity in Saskatchewan to net zero emissions.

According to the Alberta government, the Path2Zero project began construction in April this year and will receive CAD 1.8 billion (USD 1.3 billion) from the province’s petrochemical incentive program and CAD 400 million in investment tax credits from the federal government for carbon capture and clean hydrogen infrastructure.

Dow stated in its FID announcement that, in addition to government incentives and subsidies, its investment in Path2Zero is CAD 6.5 billion, accounting for half of the estimated CAD 11.6 billion project total cost by the Alberta government.

This $2 billion investment is Linde’s largest investment in a blue hydrogen project to date. Previously, Linde spent $1.8 billion to build a clean ammonia project in Beaumont, Texas, which was recently sold by developer OCI to Australian oil and gas company Woodside.