Imperial Oil secures hydrogen from Air Products for renewable diesel refinery

Under a recently announced deal, Pennsylvania-based Air Products (NYSE: APD) will supply low-carbon hydrogen to Canada’s second-largest integrated oil company Imperial Oil’s (TSX: IMO) renewable diesel plant, near Edmonton in Alberta.

The low-carbon hydrogen will be supplied from Air Products’ planned hydrogen Edmonton facility by pipeline to Imperial’s Strathcona refinery, where it will be used together with locally grown vegetable oils to produce low-carbon diesel fuel.

Air Product’s facility which is set to open in 2024, will produce 165 million cubic feet per day of hydrogen, with nearly half of it going to Imperial.

Imperial’s renewable diesel complex be the biggest facility of its kind in Canada – expected to produce more than 1 billion litres of low-carbon diesel fuel per year, which has the environmental impact of removing an estimated 650,000 vehicles off the road.

The company’s renewable diesel complex plan, estimated to cost C$500 million, was first announced in August 2021, with a final investment decision expected to come in 2022.

Imperial’s vice president of operations Jon Wetmore said the company’s efforts demonstrate its commitment towards investing in a low-carbon future, but added there is still ongoing talks with other businesses and governments before the plans are set in stone.

Air Products adds to original investment

Air Products’ overall investment in its hydrogen facility will be increased to C$1.6 billion (US$1.2 billion) to support the Imperial contract.

Air Products chief operating officer Dr Samir Serhan said the company is aiming to prove that net-zero world-scale hydrogen facilities are possible.

“Canada is rapidly implementing an energy transition that emphasises the use of low-carbon hydrogen, and Air Products is demonstrating that world-scale hydrogen facilities can be net-zero for carbon emissions,” he said.

Based in Upper Macungie Township, Air Products operates in more than 50 countries, aiming to develop, engineer, build, own and operate the world’s biggest industrial gas projects, which sustainably covert natural resources into syngas for production of high-value power, fuels and chemicals.

Imperial is an industry leader in using technology and innovation to develop Canada’s energy resources, and is known for being Canada’s largest petroleum refiner, a mass producer of crude oil, a key petrochemical producer and a leading fuels marketer.