The technology and gases company The Linde Group, and Finnish refining company Neste Oil, have agreed on a long-term on-site hydrogen supply contract.
Details from the deal indicate that Linde will build a new hydrogen production unit for Neste Oil’s Porvoo refinery near Helsinki, Finland. The total investment value from Linde and Neste Oil amounts to approximately €100m.
“This is an important project for Linde as it strengthens our position as a supplier for hydrogen in the refinery sector,” said Professor Dr. Aldo Belloni, member of the Executive Board of Linde AG. “We will once again take advantage of combining the hydrogen plant technology of our Engineering Division with the operating experience of our Gases Division.”
The Porvoo refinery, owned by Neste Oil, already has two hydrogen production units with the older one now due for replacement by a more efficient unit. Linde’s Engineering Division will build the turn-key plant while Linde’s North European subsidiary AGA will be responsible for the operation of the new unit that is planned to come on stream in 2016. Neste Oil will build the piping between the new plant and the refinery.
“Cooperation with AGA is an excellent solution for improving our hydrogen production efficiency,” said Neste Oil’s President & CEO Matti Lievonen. “The operating costs for the old hydrogen production unit are high and maintaining it would require significant investments in the coming years. With this new plant the available hydrogen production capacity of Neste Oil will be renewed and increased, which will improve the reliability and flexibility of the refinery. At the same time this solution will also release capital for us and enable us to develop our core businesses related to Neste Oil’s cleaner traffic strategy.”
“Taking into consideration the increasing feedstock cost in the region, we have selected a plant concept with very high efficiency and heat integration,” said Jan Bäckvall, Head of region Europe North at Linde. “This will not only be a cost-competitive source of hydrogen for Neste Oil but will also reduce local CO2emissions.”
The hydrogen will be produced from natural gas in a steam reforming process and it will be used at the Porvoo refinery in many processes and products. Hydrogen is used to produce, among other things, sulphur-free diesel fuel as well as high-quality base oils.
The new contract is an expansion of the two companies’ existing supply relationship at the Porvoo site. Linde already provides Neste Oil with air gases while obtaining in return off-gas CO2 for subsequent purification.