Sarnia proposed for $500-million low-carbon hydrogen project

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A new Canadian company is developing plans for a $500-million low-carbon hydrogen production facility in Sarnia.

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Wendy Franks, co-founder and CEO of Canadian Power-to-X Partners (CPXP), spoke about the proposal following a provincial announcement Friday in Sarnia of the opening of applications for a new $30-million round under Ontario’s hydrogen innovation fund.

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The company will be applying to the fund, Franks said.

“Hydrogen technologies are already unlocking new opportunities for private sector investment and creating good-paying jobs, all while enhancing our competitive edge and making Ontario a world leader in the hydrogen sector as we build a more competitive, resilient economy,” said Sam Oosterhoff, associate minister of energy-Intensive industries.

“This kind of funding that helps to de-risk our facilities” is hard to find in the private sector, Franks said. “If we can raise a little bit of grant funding from the government, we can actually parlay that into many multiples of investment.”

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Helping the low-carbon hydrogen industry to grow in Ontario is expected to create jobs and reduce carbon emissions, the government said.

The fund’s first round supported 15 projects across the province, it said.

“We’re developing a 100-MW facility here in Sarnia,” Franks said. “It would produce about 14 million kg per year, which is a very sizable amount of hydrogen to help de-carbonize and support competitiveness for local industry.”

The cost of building the facility is expected to be “in the range of $500 million to $600 million,” she said.

“We’re looking at the Highway 40 Industrial Park,” Franks said.

The company formed about two years ago and the Sarnia project would be its first production site, she said.

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Industries in the Sarnia area are significant users of hydrogen but currently rely heavily on a type produced by methods generating higher carbon emissions.

“We’re going through all the standard permitting approvals” and an application is in to gain access to the electricity the facility will need, Franks said.

“We’re very fortunate here in Ontario that we have a very strong hydro and nuclear heritage which means that our grid is quite de-carbonized,” she said.

The facility in Sarnia would use low-carbon electricity, combined with water and a piece of equipment called an electrolyzer to produce hydrogen, Franks said.

“Most of the hydrogen that’s consumed in the Sarnia area today comes from natural gas” in a process “that’s quite carbon intensive,” she said.

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CPXP would sell the “same hydrogen, the exact same molecule,” Frank said. “Just, in the production of it, we don’t generate very much, to basically no carbon.”

She said if the company is successful in its application to the provincial fund for “seed funding” for the Sarnia project, “it would result in a lot more private sector funding coming in.”

Franks said the provincial announcement Friday was “perfect timing” because of the stage planning for the Sarnia project has reached.

“Right now, we’re expecting that construction would start the second half of 2028,” she said. “In the grand scheme of infrastructure development, it’s not too far out.”

Construction of the plant is expected to create 300 to 800 full-time jobs, directly and indirectly, Franks said.

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The facility is expected to operate for 20 years with between 20 and 50 employees, she said.

“It’s not the big numbers you hear in the auto plants, but it’s not nothing either,” Franks said.

The approach is to start with something “that’s not this massive thing that’s very risky,” she said. “We feel that we’re very pragmatic in bringing forward something that has a high chance of success.”

Sarnia is “an incredible area to start something like this,” Franks said.

Along with a large number of hydrogen users, it has access to electricity and water, as well Lambton College providing training for workers, she said.

“It’s just a really important configuration of characteristics that you have here that would make something like this successful,” Franks said.

The company is looking at some other locations in Ontario and other provinces “but we specifically identified Sarnia as the best starting point,” she said.

pmorden@postmedia.com

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