A Heads of Terms agreement has been made between Kellas Midstream and Statera Energy. The agreement states that Kellas’ H2NorthEast project in Teesside will provide Statera’s Saltholme power stations with the provision of low carbon hydrogen.

Kellas Midstream is an energy infrastructure company and Statera Energy is a leading UK developed of flexible energy generation and storage technologies. The agreement created between these two companies is an excellent and innovative plan as it will allow the businesses to combine their skills and continue the development around a future supply of Hydrogen to H2NorthEast, whilst simultaneously continuing the development of decarbonising Statera’s Teesside operations.

Kellas Midstream’s project, H2NorthEast, is focused on building a low carbon, CCUS-enabled blue hydrogen facility next to Kellas’ CATS (Central Area Transmission System) gas processing terminal located in Teesside. The aim for this site is to deliver 355MW of hydrogen during Phase 1, with plans to expand this to more than a gigawatt by 2030. It also plans to contribute to an estimated 10% of the UK’s hydrogen capacity target.

Statera is the operator of two flexible generation power stations at Saltholme which are also in close proximity to CATS. The Saltholme sites have a role in the UK energy system, as they supply flexible delivery of electricity to the grid, in order to cover shortfalls in renewable generation and increases in demand. Once supplied with the hydrogen from H2NorthEast, Statera plans to use the hydrogen to switch their fuel supply from natural gas, and in doing so, transform its sites into low carbon flexible generation facilities in operation in the UK. This will enable them to achieve their goal of supporting a fully decarbonised power system.

CEO of Kellas Midstream, Nathan Morgan, commented, “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.”

CEO of Statera Energy, Tom Vernon, added, “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.”