Editor’s note: Igor Yushkov is a leading analyst of the National Energy Security Fund, expert of the Financial University under the Government of the Russian Federation.s. The article expresses the personal opinion of the author and may not coincide with the view of News.Az.
On October 23, 2024 , at the International Hydrogen Energy Conference (IH2CON) in Moscow, Konstantin Romanov, CEO of Gazprom Hydrogen, a Gazprom subsidiary, revealed the company’s plans to explore the production of natural (white) hydrogen in Eastern Siberia’s gas fields. In fields like Chayandinskoye and Kovyktinskoye, gas production yields not only methane but also components such as propane, butane, ethane, helium, and hydrogen. This hydrogen naturally forms underground and surfaces alongside the gas, posing both challenges and opportunities for Gazprom.
For Gazprom, the primary goal remains methane production, which forms the backbone of its gas supply contracts with China. Gas from Western Siberia largely comprises methane (over 95%), whereas Eastern Siberian gas contains a notable volume of other components, necessitating additional processing steps. To address this, Gazprom is constructing the Amur Gas Processing Plant, which will separate propane, butane, and other fractions, leaving purified methane for export to China. The remaining gases will be processed at a nearby petrochemical facility, managed by a partner company, to produce polyethylene, polypropylene, and other valuable products for export or domestic sales.
The approach to hydrogen may mirror Gazprom’s existing model for handling helium. If there is demand, helium is extracted; if not, it is re-injected into the formation using specialized membrane technologies. A similar strategy could be applied to hydrogen: in the absence of demand, it might be re-injected. Currently, hydrogen accompanies methane in exports to China due to its typically low concentration. However, if higher hydrogen concentrations are found, Gazprom could consider extracting and isolating it.
Gazprom is currently conducting laboratory research on hydrogen extraction methods to assess the commercial viability of its large-scale production. Should results prove promising, the company will develop industrial-scale technologies to isolate hydrogen from natural gas. Future expansion in this area depends on a range of factors, including domestic and international demand for hydrogen.
European hydrogen market and challenges for Russia
The European Union has announced plans to develop a hydrogen industry to support renewable energy sources. Hydrogen serves as a means of energy storage, addressing the challenge of renewable energy’s intermittent production. Surplus electricity, such as nighttime output from wind turbines, is converted into “green” hydrogen through water electrolysis. During peak demand, this hydrogen can be used to generate electricity, ensuring a steady supply.
Russia, however, lacks this need due to its reliance on low-carbon energy sources, including hydroelectric, nuclear, and natural gas. The domestic hydrogen market primarily serves the chemical and metallurgical industries, with consumption levels far below those of Europe. Russia intends to export hydrogen surpluses to Asian markets, including China, Japan, and South Korea, where energy storage applications are being explored, though local hydrogen supplies remain limited.
European countries emphasize the carbon footprint of hydrogen, and low-emission “white” hydrogen could become highly sought after. Nevertheless, the absence of a stable global hydrogen market has held Gazprom back from further investment in the sector. If demand stabilizes and profitable technologies for white hydrogen extraction emerge, Gazprom may consider expanding its production.
Transporting hydrogen, especially white hydrogen, presents challenges. European hydrogen production is largely located near consumption sites to avoid costly and hazardous long-distance transportation. Transporting natural gas and producing hydrogen on-site may be more economical than direct hydrogen exports.
Green hydrogen remains costly to produce, as it requires water electrolysis powered by renewable energy, which is still expensive. Alternatives include gray hydrogen from methane and blue hydrogen, which captures greenhouse gases during production—making it Europe’s preferred choice due to its reduced environmental impact. The long-term competitiveness of different hydrogen types will depend on logistics and infrastructure costs.
Hydrogen industry prospects in Eastern Siberian fields
The technical complexities surrounding hydrogen extraction from Eastern Siberian fields leave the future of this initiative uncertain. Originally, fields like Chayandinskoye and Kovyktinskoye were not developed with hydrogen extraction in mind. The Amur Gas Processing Plant, built by Gazprom, focuses on processing natural gas, separating methane, propane, butane, and ethane. Methane is then directed to the Power of Siberia pipeline for export to China, while other components are transferred to Sibur’s neighboring facility for polymer production. At present, the Amur plant lacks facilities for hydrogen separation, as demand is minimal and suitable markets are limited.
This scenario is not unique to Russia; for example, Norway and Germany recently suspended hydrogen projects, including plans for a hydrogen pipeline. The reason is simple: a global market for hydrogen consumption is yet to emerge, even within the EU itself.
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