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Kellas Midstream announced its commitment to develop H2NorthEast, a low carbon hydrogen facility based around its existing assets on Teesside. The project launch was attended by the Tees Valley Mayor and local MPs. H2NorthEast is a strategic initiative to build a 1GW facility producing low carbon, blue hydrogen utilising UK North Sea natural gas that is already processed at the existing CATS Terminal. Over 95% of the CO₂ produced will be captured and transported offshore for storage using infrastructure developed by the Northern Endurance Partnership. H2 NorthEast is being developed in response to customer demand and is in line with the UK government’s strategy to create a hydrogen economy and would contribute 20% of the government’s target of 5GW of blue hydrogen capacity by 2030.

Andy Hessell, Kellas Midstream’s Managing Director said:

“Kellas’ blue hydrogen facility H2NorthEast is a significant infrastructure project that will not only help decarbonise industry in Teesside but will also create hundreds of construction roles over a three-year development period as well as long term plant operation roles for at least 25 years”. 

 Tees Valley Mayor Ben Houchen said:

“This is yet another major project coming to our region, bringing more than 1,000 jobs during construction and hundreds of high-quality, well-paid ones in the longer term.  More than that, it will also decarbonise a significant proportion of UK North Sea gas production, while keeping Teesside, Darlington and Hartlepool on the map for innovation and demonstrating how we’re leading the UK on clean energy solutions.”

Kellas owns and operates midstream assets including the CATS Terminal and Pipeline on Teesside, which alone transports about 26% of the UK’s natural gas production on behalf of natural gas shippers.  Thanks to these assets’ unique location in proximity to industrial customers and existing expertise, Kellas is in a prime position to facilitate the decarbonisation of industry on Teesside. 

Kellas has submitted an application for H2NorthEast as part of BEIS’ cluster application under the East Coast Cluster bid. If successful, the East Coast Cluster – which groups decarbonization initiatives in Teesside and the Humber – will result in the largest industrial decarbonisation project in the UK with up to 27 million tonnes of CO₂ representing 50% of the UK’s industrial cluster carbon emissions.  The ambition is that H2NorthEast will be operational by the end of 2027, saving over 2 million tonnes of the UK’s CO₂ emissions and creating around 400 long-term operational jobs directly and across the supply chain together with approximately 1200 jobs in total during construction. 

Kellas Midstream is owned by a consortium of two long-term institutional investors, BlackRock and GIC, both of which are committed to the energy transition and are supportive of the H2NorthEast initiative.