First customer announced for Kellas Midstream’s H2NorthEast Teesside hydrogen project

Energy infrastructure company, Kellas Midstream, is delighted to announce it has signed a Heads of Terms agreement with Statera Energy, a leading UK developer of flexible energy generation and storage technologies, for the provision of low carbon hydrogen from Kellas’ H2NorthEast project in Teesside to Statera’s Saltholme power stations.

In this significant first for H2NorthEast, the agreement sets out how Kellas and Statera will work together to deepen engagement regarding the future supply of hydrogen from H2NorthEast, and the decarbonisation of Statera’s Teesside operations.

H2NorthEast is a ground-breaking project to build a low carbon, CCUS-enabled blue hydrogen facility next to Kellas’ CATS (Central Area Transmission System) gas processing terminal in Teesside. It will deliver 355MW of hydrogen in Phase 1, upscaling to more than a gigawatt by 2030 and contributing as much as 10% of the UK’s target hydrogen capacity.

Statera operates two flexible generation power stations at Saltholme which are in close proximity to CATS. The Saltholme sites play a valuable role in the UK energy system by providing the flexible delivery of electricity to the grid to cover shortfalls in renewable generation and increases in demand. Statera plans to use the hydrogen from H2NorthEast to fuel switch from natural gas and help transition its sites into the first low carbon flexible generation facilities in operation in the UK in order to support a fully decarbonised power system.

Nathan Morgan, CEO of Kellas Midstream, said: “The signature of these Heads of Terms further enhances our collaboration with Statera and represents a hugely positive step for the H2NorthEast project. It follows on from our announcements earlier this year regarding the project successfully entering front end engineering and design (FEED), and securing government funding through the Net Zero Hydrogen Fund. The agreement is an important statement of intent by Statera and highlights our commitment to engage meaningfully with stakeholders to make Teesside one of the world’s first decarbonised industrial clusters.”

Tom Vernon, CEO of Statera Energy, said: “Decarbonising thermal generation will be essential if the UK is to meet its objective of a net zero power system by 2035. Alongside power CCUS, Statera believes hydrogen fired generation will be critical in providing the long duration response required to support the intermittency of renewables. These heads of terms are an important first step in the decarbonisation of our flexible generation projects at Teesside. We look forward to working closely with Kellas as it progresses the exciting H2NorthEast project to an investment decision."