The development of hydrogen transportation infrastructure in Europe will raise demand for big diameter steel pipes starting in 2024, Russian integrated steelmaker Severstal stated today.
The business anticipates delivering hydrogen-transporting pipes within the next couple of years. According to Dmitry Goroshkov, head of energy sales and business development, the chemical qualities of the gas make it doubtful that current pipelines can safely transport it for extended periods of time.
Energy companies are investigating whether they can use existing pipelines to transmit a mixture of methane and hydrogen that can be separated at the destination, or whether they can insulate existing pipelines to protect them against hydrogen. According to Goroshkov, the infrastructure will most likely consist of a combination of existing pipelines that have been converted and new pipes specifically intended to handle hydrogen. While many thousand kilometers of pipelines will be required to transport hydrogen, the impact on steel demand will be determined by the extent to which the existing network is converted, he added.
Although about 70% of Severstal’s energy sector revenues are tied to oil and gas transportation, the corporation recognizes the growing relevance of alternative energy sources such as wind power. It just completed its first trial sale of thick plate intended for use in the framework of an offshore wind turbine. Due to the fact that offshore wind turbines are larger than onshore units, their criteria are more stringent. The business views wind tower makers internationally — and particularly in Europe — as a significant opportunity. It supplies about 100% of the steel used in the construction of wind turbines in its domestic market.
Additionally, Severstal expanded exports of large-diameter pipes, a critical and premium product for the company. It will export 60,000t of large diameter pipes this year, representing 25% of total sales, up from 24,000t last year. Demand has already begun to rebound from the pandemic and will be bolstered next year by high energy prices, which have facilitated the commencement of projects that were stalled during the outbreak. Demand is also being bolstered by the development of liquefied natural gas infrastructure and the discovery of new oil and gas reserves. Within Russia, demand for large-diameter pipes might reach a peak in 2023-24 when national energy corporations recommence investments in fields and pipelines, Goroshkov said.
Severstal is working to verify the carbon content of its steel for sale in the EU and is targeting a 3 percent reduction in carbon emissions by 2023, compared to 2020, and a 10% reduction in carbon emissions by 2030.
