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Monday, September 5, 2022
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Cutting emissions and reducing time to market are today key success factors

Interview with Loic Chapuis, Senior Vice President Gas & Low-Carbon Energies of Technip Energies

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Loic Chapuis is Senior Vice President Gas & Low-Carbon Energies of Technip Energies.

Since joining the company in 2006, he has held various business, development and operational roles for major projects including the Shell Prelude FLNG project, Yamal LNG and Arctic LNG2 ventures. Most recently, Loic was SVP of the Paris Business Unit and Technip France Managing Director.

Can you explain the role that Gas & Low-Carbon Energies will play in the Energy Transition?

Gas & Low-Carbon Energies is the business line which includes our traditional gas activities, LNG and Floating LNG (FLNG) as well as technologies to decarbonize gas transformation, which covers blue hydrogen and blue ammonia production using carbon capture and storage (CCUS). Green hydrogen, which is produced via electrolysis powered by renewable energy, falls within the business line scope of Carbon-Free Solutions.

Natural gas is an important fuel for industry and power generation, and liquefaction (LNG) makes it transportable and tradeable around the world. Natural gas is the fossil fuel with the lowest emissions of CO2, and for new power plants, it’s widely replacing coal as a fuel, thus reducing CO2 emissions of the facility by up to 50%. Gas is therefore a critical energy to help us accelerate the energy transition journey. Different market scenarios expect natural gas consumption to continue growing up to 2035 or 2040, before peaking and then potentially decreasing as it could be replaced by carbon-free energies to reach net zero by 2050.

CCUS technologies are a way of avoiding CO2 emissions and we are seeing new LNG projects such as the NFE project in Qatar, which includes large carbon capture and sequestration facilities. CCUS is also used to produce low-carbon, or blue, hydrogen and ammonia. In the IEA net-zero scenario, hydrogen as a fuel has the potential to aid global decarbonization and make up around 10% of the global energy mix by 2050, from almost nil today.

Where do you see the key challenges and opportunities for the business?

Let’s start with the opportunities. We have a very dynamic market – even before the war in Ukraine – with natural gas displacing coal in many markets, driving strong demand for LNG.

Demand has increased further since the Russian invasion of Ukraine, as LNG allows a greater mix of energy imports and can ensure independence from piped energy sources. Europe has an urgent need for alternative sources of gas and LNG will be further imported from other places like the USA as well as other sources which were being developed and have since been accelerated. This is the case for Mozambique and the Middle East where we have several projects underway. We are delivering the Coral FLNG unit, offshore Mozambique for instance.

This strong demand is driving a rush for new LNG capacity, so one of the key challenges today is to reduce time to market. This is where Technip Energies has a competitive advantage. As a pioneer in plant modularization, having invested in this fabrication process to deliver major projects over the last ten years, we are able to reduce time to market and limit project risks.

What market conditions are necessary to drive demand for Blue Hydrogen?

Most hydrogen today is grey, produced from fossil fuels through a process of steam methane reforming (SMR) for which Technip Energies has installed 35% of worldwide capacity and is the leader. Low-carbon hydrogen, or blue hydrogen, involves the capture of the co-produced CO2. Because it involves an additional process, it necessarily implies additional costs of process energy and CO2 storage. To encourage the development of clean hydrogen, different markets are taking different approaches; in Europe through a carbon tax, and in the USA through various incentives to capture and use CO2. Thanks to these measures, CCUS projects become economically viable.

We see blue hydrogen developing in the USA, the Middle East, the UK and potentially Northern Europe and Australia, where they have large amounts of cheap gas and the facilities to capture and store the CO2 in depleted reservoirs. In Europe, on the other hand, which has few suitable CO2 storage solutions, and where gas is more expensive, we expect to see the development of green hydrogen as the expansion of renewable energies lowers the cost of electricity for electrolysis.

In addition to the extra cost to produce clean hydrogen, we must also consider the required infrastructure. With a liquefaction temperature below -250°C, everything is still to be developed for conversion, transportation, and storage of hydrogen. Blue and green ammonia, NH3, could become a vector for H2, but it is toxic and acceptable solutions need to be worked on before it can be used directly as a fuel.

What are the main fields of development in terms of R&D, technologies, and solutions?

We have four main fields of development. The first involves improving our own technologies to decarbonize the production process as much as possible. This involves the electrification of utilities, or the use of hydrogen in the turbine for compressors for instance to decarbonize the production of LNG. We are improving our SMR technology for hydrogen, and we are working with partners around technology to capture and transfer CO2.

The second area of development involves scouting the markets for new technologies. We look to partner with start-ups or companies with new technologies in the field of clean gas production, methanation, and hydrogen that are not yet mature, to help bring these technologies to market.

A third area concerns carbon storage, or rather the process of transferring the captured CO2 to the storage facility. Loading systems are used to connect LNG carriers to the LNG terminal and the network. We have extensive experience in this technology, together with our manufacturing plant in Sens, France, where we are developing technologies to handle liquefied CO2 transfer. We are also in the phase of certifying our loading arms with a different technology to transfer liquid hydrogen.

And the fourth area is the field of modularization. Our SnapLNG™ solution, is a compact modular design concept for mid-scale trains with standardized components and technology. The system improves speed to market, providing greater certainty around both costs and schedule, with the best available process technology, refrigerant compression, and digitalization. Specific instrumentation is embedded in the design to prevent methane leakage, ensuring lower emissions. We were recently awarded a Pre-FID contract for the Texas LNG project in the USA which integrates this modular solution.

Thanks to our ability to manage complex project ecosystems, to our LNG and blue hydrogen plant track-record, to the development of new technologies and to modularized solutions, Technip Energies is well positioned to meet the current acceleration in new LNG capacity.