Plans for a massive blue hydrogen production facility in Teesside have taken a step forward as developers Kellas Midstream and SSE Thermal look to integrate the project into a regional pipeline network.

The project, known as H2NorthEast (H2NE), aims to produce 1GW of low-carbon hydrogen. Under a newly signed memorandum of understanding with gas operator Northern Gas Networks, the facility would distribute hydrogen to industrial end-users through the East Coast Cluster (ECC) Teesside network.

The move signals a major push to create a fully integrated hydrogen value chain in the United Kingdom. By utilizing a dedicated regional pipeline, H2NE intends to supply clean energy to critical industries, helping the region meet its decarbonization targets.

“H2NE’s inclusion in a fully integrated UK hydrogen value chain has the potential to aid decarbonization in critical industries,” said Nathan Morgan, CEO of Kellas Midstream.

Central to the project is its reliance on carbon capture and storage (CCS). So far, H2NE has submitted a bid to join the ECC program, which would allow carbon dioxide generated during production to be captured and transported for permanent storage beneath the North Sea. 

For the first phase of the project, which targets a 355MW capacity, developers plan to use Johnson Matthey’s LCH carbon capture technology.

Despite the technical progress, the project faces a shifting timeline. While Kellas Midstream originally aimed to have the full 1GW site operational by 2030, infrastructure delays have pushed back those goals. 

The Northern Endurance Partnership CO2 storage site, a critical component for the project’s carbon sequestration, is now not expected to be online until 2032.

This delay in the storage network effectively pauses potential blue hydrogen production until the necessary transport and storage infrastructure is ready to receive emissions.

The H2NE project has been under development for several years, with early-stage engineering work commencing in 2023. Once complete, the Teesside-based network is expected to serve as a blueprint for industrial decarbonization across the country.

The latest developments come weeks after Energy giants submitted their bid for a $674- million (£500 million) government funding to construct a major hydrogen pipeline network, including storage facilities across northeast England to accelerate the transition to a zero-emission future.