Even if the US abandons crude oil, midstream equities and master limited partnership-related exchange traded funds might shift away from traditional energy and toward hydrogen transport.
Mauricio Samaniego, Senior Research Analyst, Alerian and S-Network Global Indexes, told Forbes, “As you may be aware, the recurring hydrogen theme for midstream has revolved around natural gas pipelines and storage facilities being used for the transportation and storage of blue or green hydrogen over the next decade.”
“At the moment, hydrogen projects are in their infancy, with much of the focus on blending hydrogen into existing natural gas pipelines, as Enbridge, TC Energy, Kinder Morgan, and The Williams Company have proposed, researched, and/or debated. TRP and Enterprise Product Partners have also considered — and are assessing — the use of existing nuclear and petrochemical reactors for hydrogen generation, according to Samaniego.
Samaniego outlined a few practical hydrogen applications. For starters, compression is used by midstream operators to transport natural gas around. To enhance ESG indicators, a midstream operator may use hydrogen produced locally from underused products like ethane.
Most mainline applications use industrial gas turbines as primary movers. Each of these turbines produces carbon dioxide, which may necessitate changes to satisfy future ESG requirements. A predicted 5 million horsepower of compression might be replaced in the next 15 years.
CO2 reduction objectives are also being set for gas-fired power plants. Operators may mix methane and up to 20% hydrogen to reach these aggressive objectives and reduce CO2 emissions.
Midstream operators are experimenting with blending hydrogen into natural gas pipelines to fulfill the growing hydrogen demand. In an earnings call, Kinder Morgan, for example, stated that it has the technology in place to blend hydrogen with natural gas and transport it via pipelines.