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Equinor Cancels Blue Hydrogen Export Plans to Germany Amid Low Demand
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Equinor ASA (EQNR - Free Report) , a Norwegian state-owned energy company, has scrapped its plans to export blue hydrogen to Germany due to high costs and a lack of sufficient demand, per media reports. The move came at the heels of the company's initial partnership with German energy giant RWE, which was established in January 2022 to create a hydrogen supply network aimed at reducing greenhouse gas emissions in German power plants.
Cost and Lack of Demand Force EQNR to Reevaluate Partnership
Equinor initially expected to produce blue hydrogen from natural gas in Norway, combined with carbon capture and storage, and export it to Germany via an offshore hydrogen pipeline. However, the cost of the entire supply chain, which Equinor CEO Anders Opedal had previously estimated could reach "tens" of billions of euros, proved prohibitive. The pipeline alone was projected to cost around €3 billion ($3.35 billion). Furthermore, without firm long-term commitments from European buyers to import hydrogen, EQNR could not justify continuing the project.
RWE, in a statement, clarified that while it was not responsible for the hydrogen pipeline, it needed support from both Norway and Germany. The German energy company noted that hydrogen-ready plants could begin production by 2030, provided the German government approves a support program for such facilities.
However, Equinor spokesperson Magnus Frantzen Eidsvold confirmed that the project is no longer viable, leading to the discontinuation of the early-phase development.
EQNR Shifts Focus to Alternative Hydrogen Projects
While the blue hydrogen pipeline to Germany has been abandoned, Equinor is shifting its focus to other early-phase hydrogen projects in Britain and the Netherlands. In Germany, RWE’s hydrogen-ready gas power plants will still go ahead, but hydrogen will now be sourced within the continent, rather than being imported from Norway. The German government is exploring options to convert Norwegian gas into blue hydrogen in the Netherlands, with captured CO2 sent back to Norway for storage.
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Equinor Cancels Blue Hydrogen Export Plans to Germany Amid Low Demand
Equinor ASA (EQNR - Free Report) , a Norwegian state-owned energy company, has scrapped its plans to export blue hydrogen to Germany due to high costs and a lack of sufficient demand, per media reports. The move came at the heels of the company's initial partnership with German energy giant RWE, which was established in January 2022 to create a hydrogen supply network aimed at reducing greenhouse gas emissions in German power plants.
Cost and Lack of Demand Force EQNR to Reevaluate Partnership
Equinor initially expected to produce blue hydrogen from natural gas in Norway, combined with carbon capture and storage, and export it to Germany via an offshore hydrogen pipeline. However, the cost of the entire supply chain, which Equinor CEO Anders Opedal had previously estimated could reach "tens" of billions of euros, proved prohibitive. The pipeline alone was projected to cost around €3 billion ($3.35 billion). Furthermore, without firm long-term commitments from European buyers to import hydrogen, EQNR could not justify continuing the project.
RWE, in a statement, clarified that while it was not responsible for the hydrogen pipeline, it needed support from both Norway and Germany. The German energy company noted that hydrogen-ready plants could begin production by 2030, provided the German government approves a support program for such facilities.
However, Equinor spokesperson Magnus Frantzen Eidsvold confirmed that the project is no longer viable, leading to the discontinuation of the early-phase development.
EQNR Shifts Focus to Alternative Hydrogen Projects
While the blue hydrogen pipeline to Germany has been abandoned, Equinor is shifting its focus to other early-phase hydrogen projects in Britain and the Netherlands. In Germany, RWE’s hydrogen-ready gas power plants will still go ahead, but hydrogen will now be sourced within the continent, rather than being imported from Norway. The German government is exploring options to convert Norwegian gas into blue hydrogen in the Netherlands, with captured CO2 sent back to Norway for storage.
EQNR’s Zacks Rank & Key Picks
EQNR currently carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector may look at some better-ranked stocks like TechnipFMC plc (FTI - Free Report) , Core Laboratories Inc. (CLB - Free Report) and VAALCO Energy, Inc. (EGY - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
TechnipFMC is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry, with a focus on the subsea segment in offshore basins worldwide. FTI’s growing backlog ensures strong revenue visibility and supports margin improvements.
The Zacks Consensus Estimate for FTI’s 2024 EPS is pegged at $1.34. The company has a Zacks Style Score of B for Value and A for Growth. It has witnessed upward earnings estimate revisions for 2025 in the past 30 days.
Core Laboratories, an oilfield services company, has a deep portfolio of sophisticated, proprietary products and services that positions it to take advantage of the growing maturity in the global hydrocarbon reserve base. CLB’s expanding international upstream projects indicate a positive trajectory for revenues and profitability, especially as oil demand continues to rise globally.
The Zacks Consensus Estimate for CLB’s 2024 EPS is pegged at $0.95. The company has a Value Score of B. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
VAALCO Energy is an independent energy company involved in upstream business operations, with a diversified presence in Africa and Canada. Having a large inventory of drilling locations in premium Canadian Acreage, the company’s production outlook seems bright.
The Zacks Consensus Estimate for EGY’s 2024 EPS is pegged at $0.65. The company has a Value Score of A. It has witnessed upward earnings estimate revisions for 2024 in the past 30 days.