How Clean is Canada’s Blue Hydrogen?

At the heart of our plant is the reforming train. Natural gas is first desulfurized, pre-heated, and partially reacted in the pre-reformer, before being sent to our primary reformer, the ATR. The ATR is central to this section, and is fueled by high purity oxygen and reforms natural gas and steam to yield a stream of synthesis gas, or syngas. This stream consists of our desired products of hydrogen and CO₂, along with unreacted CO and excess water. High and low temperature water-gas shift reactors then convert this remaining CO and water to CO₂ and additional hydrogen.

Where existing plants employ the traditional steam-methane reformers with an external furnace, our plant incorporates oxidation and combustion reactions into the main reformer, which allows us to capture over 90% of the CO₂ we generate. Furthermore, the reactor provides all of its own heat (hence auto-thermal), this heat is conserved in the product stream, and is used to meet the heating duty requirements of several other pieces of equipment by way of heat integration.

The ASU uses cryogenic distillation to separate oxygen and nitrogen from a stream of compressed dried air. Air distillation was chosen as a means to produce oxygen because it is the most cost-effective process when a high volume of oxygen and/or nitrogen is needed [Kolmetz, 2013]. The ASU meets the oxygen demands of the ATR and also produces valuable nitrogen as a by-product that can be sold to industrial customers in the area. Its operation can be split into 2 phases:

Phase 1 – Pressurization and Drying: In the first phase, air is pressurized and dried. This is done through 3 stages of compression facilitated by intercoolers and water knockout drums. The pressurized dry air then flows through an adsorber to remove any residual moisture before heading into phase two of the process – cryogenic distillation. 

Phase 2 – Cryogenic Distillation: The dry air is first cooled via a multi-stream heat exchanger. The chilled air then passes through a Joule-Thomson valve for further cooling before being fed to the cryogenic air distillation column (CADC). The distillate product consists of high purity nitrogen while the bottoms product is high purity oxygen.

Heat integration has been extensively employed throughout the ASU, allowing for significant energy savings. Four path cross-flow sieve trays are used for the internals of the column due to savings in capital cost and their separation efficiency [Schoenmakers and Gorak, 2014].

The stream of syngas produced by the reforming train consists almost entirely of hydrogen and CO₂. With this final composition it is passed to a set of 16 VPSA vessels, which operate on a cyclic basis to continually and selectively adsorb CO₂ and other impurities from hydrogen, yielding high-purity streams of each product. The cycle consists of a high pressure adsorption step to produce high purity hydrogen, pressure equalization and recycle steps, and a vacuum blowdown step at 30 mbar that produces high purity CO₂.

VPSA is employed rather than traditional amine-based CO₂ absorption due to significant advantages in lifetime costs, as well as plant energy efficiency and simplicity. Our VPSA units ensure that the carbon originally bound to hydrogen in the form of natural gas is as it should be – contained, pure, and ready to be stored or utilized.

Autothermal reforming was chosen as the reforming technology due to its potential for offering high rates of carbon capture and economy of scale. During the last decades, the technology has matured for use in industry in the form of secondary reformers, placed after the main steam methane reformer to maximize conversion. Recent  innovations have resulted in using an ATR as the primary reforming train which removes the external furnace, improving energy efficiency and consolidating a vast majority of the carbon produced by the process in a single stream to provide ease of capture.

Carbon capture with utilization and storage (CCUS) is the removal of carbon dioxide from the product stream to either be used in applications such as enhanced oil recovery (EOR) or permanent sequestration. This allows the carbon emissions of a plant to be dramatically reduced and produces additional value.
The purification of hydrogen and carbon dioxide will be accomplished in a single unit by means of a novel vacuum pressure swing adsorption (VPSA) cycle. The cycle is able to absorb carbon dioxide and off gasses to produce pure hydrogen, and then selectively desorb CO₂. As a result of this technology we are able to produce hydrogen at 99.5% purity and CO₂ at 95% purity, making the carbon suitable for export to the ACTL and subsequent use in EOR operations.

The global market outlook of blue hydrogen is expected to remain in a very competitive and highly consolidated landscape in the years ahead [Emergen Research, 2020]. Blue hydrogen production is projected to reach 3.3 Mt annually by 2028 versus its current rate of 0.6 Mt per year [S&P Global, 2020]. Its market size is anticipated to reach $3.10B by 2027 versus $1.02B in 2019, at a compound annual growth rate (CAGR) of 14.8% [Emergen Research, 2020]. The key factors influencing the market include growing demands for clean hydrogen energy with low carbon content, blue hydrogen as an enabler of the green hydrogen, increasing usage of hydrogen fuel as an active propulsion system in automotive industry, and increasing usage of the hydrogen as an active energy source [Emergen Research, 2020].

Western Canada is in a leading position to produce blue hydrogen and has a series of unique advantages compared to competing locations like Europe, the Middle East and Asia. The advantages include appropriate geological formations with strong carbon storage capacity, a reliable and low cost natural gas supply, existing technology and  infrastructure for Carbon Capture and Storage (CCS) as well as an increasing federal carbon tax. Western Canada’s advantage is also evident by the existing investment in Alberta’s blue hydrogen sector with companies like Air Products, Suncor, ATCO and ITOCHU Corporation proposing the construction of new facilities in the Edmonton Metropolitan Region (EMR) [Government of Alberta, 2021].

Our economic analysis has resulted in a very positive financial outlook. Based on our calculations, the required total capital investment (TCI) for our plant is $590MM, with annual operating expenses (OPEX) equal to $98.8MM. The estimated after-tax net annual income is $204.8MM and the annual cash flow after tax is $215.5MM, using straight-line depreciation with an interest rate of 10%. The net present value (NPV) over a 30-year-long service life is calculated to be $2.1B. The payback period was found to be equal to 3 years and the discounted rate of return (DROI) was calculated to be 36.5%. All major financial indicators have shown that our proposed plant is economically feasible and would be profitable.

Our team also performed a sensitivity analysis to explore the effects of important parameters on the economic potential of our proposed facility. These parameters include variations in the price of the natural gas feedstock, the equipment and overall project cost in the TCI, and even the selling price of hydrogen. As shown in the figure below, our plant remains profitable even at the worst-case-scenarios, with a minimum NPV being equal to $1.0B.