bp has agreed to acquire a 40.5% stake in the Asian Renewable Energy Hub (AREH), which has the potential to become one of the world’s largest green hydrogen hubs.

By using world-scale renewable energy generation to generate and export green hydrogen and green ammonia, AREH aims to provide sustainable power to local customers in the largest mining region in the world while also producing green power, ammonia, and hydrogen for the local market and export to major international markets.

The Australian Renewable Energy Hub plans to develop onshore wind and solar power generation in multiple phases to a total generating capacity of up to 26 gigawatts (GW), or approximately one-third of all electricity in Australia in 2020.

Anja-Isabel Dotzenrath, bp’s executive vice president of gas and low carbon energy, said: “AREH is set to be one of the largest renewable and green hydrogen energy hubs in the world and can make a significant contribution to Australia and the wider Asia Pacific region’s energy transition.”

AREH could provide bp with significant net renewable generating capacity and contribute significantly to its strategic aim of capturing a 10 percent share in core hydrogen markets worldwide.

The agreement paves the way for bp to acquire a 40.5% interest in the project from 1 July 2022, subject to approvals. The other AREH shareholders will remain InterContinental Energy (26.4%), CWP Global (17.8%) and Macquarie Capital and Macquarie’s Green Investment Group (15.3%).