bp and Costain working on H2Teesside hydrogen project

When it was first confirmed that global giant bp was to be the pivotal investor in the unprecedented evolution of the former Redcar steelworks site into a globally important low carbon energy hub, the potential was soon apparent.

With that level of experience and innovation coming to the North East and the plans for three major projects that would help redefine how the planet consumes its energy, the possibilities for long-term careers, new skills and inspired young workers were abundant.

To move it away from plans and headlines and make it all happen, bp sought partners with the expertise to deliver different aspects of these projects. As pioneers of this type of project, this was a genuine first, so there was one chance to get it right and set a template for success that would be followed for generations.

So the right businesses had to be found and brought on board to form the ultimate collaboration that could literally change our futures.

Now that bp has agreed a statement of principles with the UK Government and has signed front-end engineering design (FEED) contracts for the first of those projects – H2Teesside – we can get a clear idea of why this region is at the centre of so much attention.

H2Teesside aims to be one of the largest blue hydrogen production facilities in the UK, delivering domestically‐produced low carbon hydrogen the UK needs.

How the H2Teesside site could look (Image: bp)

It would produce around 160,000 tonnes of low carbon hydrogen per annum, which will replace existing natural gas consumption by industrial emitters in Teesside, and capture and send for secure long-term storage approximately two million tonnes of CO2 per year.

Alongside bp’s other proposed projects in the region, the project could help transform Teesside into the UK’s leading hydrogen hub and kickstart a highly-skilled supply chain.

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As part of the East Coast Cluster, the potential success of the project is the equivalent to capturing the emissions from the heating of one million UK households.  The project is targeting 1.2 GW of hydrogen production, which equates to more than 10 per cent of the UK’s 2030 hydrogen production target. It aims to supply a diverse range of customers, including those already established in the region as well as new businesses attracted to low carbon hydrogen produced at scale.  So agreeing this next move with the Department for Energy Security and Net Zero (DESNZ) allows H2Teesside to enter the final stage of negotiations.

One of the biggest decisions was to ask infrastructure solutions company Costain to play a key role.

Costain’s multi-disciplinary in-house engineering team will deliver the FEED to enable the construction for the new, 31km onshore pipeline distribution network that will deliver purified and dehydrated hydrogen to industrial end users.

Costain is expected to complete the FEED project in 2025.

The Group’s Energy Sector director Laura Hughes, who has her own very personal link to the area, told me the company’s Teesside heritage goes back to the Sixties.

Laura Hughes (Image: bp)

A chemical engineer by degree, Laura started her career with Shell before taking international commercial roles with Tullow Oil and operational leadership roles with Cuadrilla. Most recently, Laura has been leading Fugro’s UK ground engineering business.

She is a Fellow of both the IChemE and the Energy Institute.

‘Costain has been an integral part of the energy landscape in the UK for decades, keeping the lights on and keeping fuel flowing to industry,’ she says.

‘On Teesside, we can trace some of our involvement to the earliest works there and the original industrialisation in the area. So this really is a continuation of our involvement in supporting the energy and infrastructure landscape in the UK, now within one of the leading industrial clusters.

‘For me personally this means a lot. My dad was a chief engineer with ICI and worked on Wilton back in the day. So it’s amazing for me to sit with him, having seen the rise and then the decline of the area and say we’re part of a reinvention.

‘I’m also absolutely delighted we are working with bp on this – it’s really the stuff that gets people out of bed, bounding into the office each day ready to make their contribution.

‘The North is an incredibly important region for us across a number of our sectors and I think if we want to look for inspiration about what such a powerful industrial cluster can do then we can look at our other work here and see the way in which all the Social Value programmes have really benefited the area. Couple that with the collaborations we’ve got with universities which facilitate our local skills development and we can all see that the impact we are having on the region will only grow as this partnership grows.’ There is clearly a passion here to get the job done in a way that showcases the depth of talent and skill in the region and that makes it clear that – within this once in a lifetime window – we are the best in the world.

Working at the site (Image: bp)

Laura says ‘a significant number’ of her team have been drawn from the area, so this means something special to them too, and perhaps there will be many more conversations with mums, dads and grandparents about how this next generation is helping the region change.

She tells me: ‘The carbon capture component and the hydrogen component are integral to one another and together make it an important world-class project because the idea of approaching regional decarbonisation in clusters is something that’s never been tried before and is being recognised as the way forward. So it’s great to be absolutely at the heart of that and for us to be able to bring our hydrogen expertise into that complex web and find a solution to decarbonising an industrial area.

“In the UK we’re just getting clarity on exactly what decarbonisation means. If I think back to my career in 2008, I was working for a company called Tullow and we were looking at CCS and linking power production to the sequestration of carbon. It has taken quite a few iterations since then and for the bulk of my career these have been very live conversations. But I think we’re getting to the point now where we’re starting to get clarity.”

For some years, Costain has played a vital role in our understanding of hydrogen potential as a zero-carbon energy vector, doing conceptual work around vital steps such as hydrogen blended with natural gas as a viable option for people’s homes, the safety aspects of using it for transportation and the whole idea of energy security. Now that deep experience means they are very much in control of their part of the planned H2Teesside project as they help tackle the most fundamental challenges – how do we get the carbon out and how do we get the hydrogen in?

“We’re engineers and we love solving problems,” is Laura’s succinct summary.

“What more fundamental issue can there be to turn our intellectual problem-solving to than how we’re going to deliver the large-scale low carbon projects that will play an important role in helping to achieve net zero? This is an opportunity to put our problem-solving mindset to work and make a significant contribution to our national low carbon hydrogen targets this decade, so our people are applying themselves at pace to find the right answers.

“It is a huge collaboration and everyone has their own perspective and their own value to bring to the discussion.

“bp has the overview of project delivery and knows how you piece together the investment with the different stakeholders. It’s fabulous for us all to be working with the team from [Stockton-on-Tees-based] px Group as well because a number of them have spent their entire careers working here and they know it like the back of their hands.

“Then there is Costain, who know about the technical side of the operation, but also about how to handle multi-faceted delivery in the UK – how you work with stakeholders, what planning conditions mean, what it means to construct on an operational site and how you apply modern technology and digitalisation to the control systems for either designing, delivering or operating.

“Our team has been busy on the ground in Teesside for a number of years now, working on bp’s planned Net Zero Teesside project – which aims to be one of the world’s first commercial scale gas-fired power stations with carbon capture – and with the Northern Endurance Partnership and the CO2 pipeline. So this sits very comfortably alongside of that.”

Another reason why Costain’s work on H2Teesside is such a natural fit is the group’s strong belief in the power of collaboration, which needs to be a core part of any work done here if we are to put down the deepest of foundations for the future.

It’s almost as if the application of that mantra throughout its work in the North East and across the world has led up to this bp project.

This could be the perfect partnership.

“Collaboration is so important and something that we all need to keep encouraging at every level,” said Laura.

‘There’s collaboration between the parties like ourselves and bp, which is such a natural partnership because while there are competitive elements on some projects, here we won’t let that get in the way of joined up thinking. For true collaboration we have to drive for a completely different way of working – we absolutely have to be doing this in a really super collaborative way that hasn’t been achieved before so that we can meet the timelines that we want and help the UK to decarbonise.

‘For me, there is still more that UK businesses can do to underline that and I put the challenge back to all of the diverse companies working in the North East and beyond – let’s get in this together and be as joined up as we possibly can.’ If we have collaboration in place – and we clearly have – then putting the right skills into the mix as well becomes more achievable. The essential skills programme that will run alongside H2Teesside aims to reach more than 5,000 people to help inspire the next generation of talent and provide a pipeline every bit as important as the CO2 and hydrogen networks.

‘These are big projects, so it will all need a little bit of everything as we assemble our teams,’ said Laura.

‘We already have our core engineering teams in Manchester and Aberdeen, but our Teesside team is now growing rapidly with a view to the potential construction of the carbon capture network later in the year, but also then the growth of the hydrogen scheme.

‘That means we need to recruit for a range of skills, from project management to technical expertise with people at all levels of experience, so that what bp is planning to achieve can provide plenty of opportunities for early career people and apprentices.

‘As well as seasoned engineers to build that team, we need a really multi skilled and multi multifaceted group of people and I think from a supply point of view, we have to have our eyes on it and look deep into this region and beyond.

‘There are a huge number of projects in the energy sector, but also infrastructure projects, all sorts of things that Costain wants to move forward with in order to progress the UK economy. And if you stack all of those up simultaneously then it’s certainly a challenge to see where the right skills are going to come from in the timeline that you need.

‘But that brings us back to collaboration because the different players need to have a co-ordinated view around the make-up of the workforce to make sure we’re not competing for that same skilled group of people. We don’t want to give contradictory signals to people and cause confusion, so we have to think quite openly.

‘We will be looking for future potential as well as historic experience, turning best practices in Diversity and Inclusion into operational decisions as we identify who the right people are to draw in and be part of this.

‘When we have found the right people, we have to provide the training opportunities as well because there’s lots of people with transferable skills who might need a bit of adjustment. They don’t have to have worked with hydrogen or with CO2 previously in their career because the right people with the right attitude from very diverse technical backgrounds will be able to pivot, upskill and step into those opportunities.

‘Skills have always been a priority for bp and for Costain, and providing clarity to people and then giving them the opportunities will make this all happen.’ Working alongside Costain, Technip Energies will deliver the FEED for the proposed blue hydrogen production facility, including establishing the execution methodology, a schedule and project cost. 

Mario Tommaselli (Image: bp)

Mario Tommaselli, SVP Gas and Low Carbon Energies of Technip Energies, said: ‘Being selected for bp’s H2Teesside project highlights Technip Energies’ proven experience in working as a technology integrator on large-scale projects. By leveraging our extensive expertise in hydrogen and carbon capture technologies, we are well-positioned to deliver innovative and scalable solutions that align with the UK’s ambitious decarbonization targets.’

Andy Lane talks to Mike Hughes (Image: bp)

Andy Lane, VP for hydrogen and CCUS UK at bp, said: ‘These agreements mark further critical milestones for H2Teesside as the project continues to move towards EPC contracts and then construction. The project could play a critical role in decarbonising Teesside, helping to transform the region into a leading hydrogen hub and kickstart the UK’s low carbon hydrogen economy.’

Tees Valley Mayor Ben Houchen added: ‘H2 Teesside is a project of huge national importance and yet another example of how we are leading the way in developing clean, green industries of the future such as low-carbon hydrogen production.

‘It’s fantastic to see further progress now being made and I am in regular dialogue with Number 10 to ensure this and other key projects are fully supported to deliver the well-paid jobs and multi-billion pound investments to transform our local economy.’ What a position we are in here in the North East, where there are so many groundbreaking projects that we almost have difficulty keeping track of them as investors who could have chosen any one of a number of sites around the world decide that this is the perfect place for them.

While the eyes of the world are on us we’re learning all the time about the potential for the planet and our young people. But while we perhaps get a little over-excited, bp is thinking about each step at a granular level, making sure it’s the right foundation for the next job and the next project. We need that level of experience – and innovation.

Costain in our region

Costain is, of course, no stranger to the North East. The energy sector is a fast-moving place to work in, but the company is already pioneering some of the biggest infrastructure projects here, completely integrating its work to add to the ecosystem of the North East.

The company has been appointed by Northumbrian Water to help shape and deliver its strategic infrastructure upgrade programme. The framework will see contracts awarded with the potential value of up to £670m to Costain over the 12-year period and builds on significant recent wins in the water sector for the company. The contract will run for a seven-year initial term with an option for a further five-year extension. 

Costain will also be improving approximately four miles of the A1 between junctions 65 (Birtley) and 67 (Coal House). The existing road will be widened between the junctions to help manage traffic joining and leaving the A1. Northbound, National Highways will increase the number of lanes from two to three and on the Southbound side, from three to four.

On the railways, Costain is already working across a number of stations and lines in the north of England to upgrade and improve connectivity.