August 16

Ørsted pulls the plug on European e-methanol project

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BunkeringEurope

Danish utility Ørsted has abandoned its pioneering e-methanol project under construction in northern Sweden, blaming poor market growth and difficulty in securing long-term offtake contracts.

Ørsted assumed full ownership and took a final investment decision on the project called FlagshipONE in late 2022 – originally developed by Liquid Wind and touted at the time as the largest FID’ed green e-methanol project in Europe.

It was the company’s first commercial-scale Power-to-X facility described as an important stepping stone towards Ørsted’s ambition of establishing itself as a top player in green fuels for shipping.

“While we were aware of the substantial uncertainties and risks associated with the development of a pioneering and immature liquid e-fuel project and market at the time of the FID, it was a strategic choice to take a leading position in shaping the industry,” Ørsted said in its earnings statement.

Methanol has become the most popular alternative fuel in the global newbuild orderbook alongside LNG, but its high cost has kept operators from signing up for the fuel in the long term.

Ørsted said the industrialisation of the technology as well as the commercial development of the offtake market have progressed significantly slower than expected.

“The business case has deteriorated during maturation due to the inability to sign long-term offtake contracts at sustainable pricing and significantly higher project costs,” Ørsted noted, adding that moving forward it would de-prioritise its efforts within the liquid e-fuel market.

Located in Örnsköldsvik, the factory was expected to enter into operation in 2025 and produce around 50,000 tonnes of e-methanol each year.

The post Ørsted pulls the plug on European e-methanol project appeared first on Energy News Beat.

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