ConocoPhillips, one of the biggest independent oil producers in the United States, will supply natural gas and oversee a carbon capture and storage facility for a proposed U.S. hydrogen gas project that will be developed in collaboration with Japan’s biggest utility JERA, Reuters reported based on the companies’ statements.

Natural gas producers now have a new market opportunity thanks to the agreement to supply gas for hydrogen, a potentially clean fuel for the generation of power. Conoco is one among several businesses that have long-term supply agreements in place with LNG producers who provide utilities.

According to JERA, the Japanese gas and electricity company that is in charge of the plant, a feasibility study to evaluate the hydrogen project might be finished by the end of the year. It seeks to create ammonia that can be exported and sold in the United States, Europe, and Asia by producing hydrogen from natural gas.

“JERA and ConocoPhillips will be a low-cost ammonia supplier to domestic and international markets,” said JERA Americas Chief Executive Steven Winn. The plant could be in operation within five to eight years at a site along the U.S. Gulf Coast.

The oil and gas company has announced investments in multibillion dollar LNG projects in Qatar and the United States. Additionally, Sempra, a developer of an LNG project, is investigating a carbon capture facility for it. View More

A U.S. division of JERA, JERA Americas, stated that the business, Uniper SE of Germany, and ConocoPhillips want to generate 2 million tonnes of ammonia annually initially, with the potential to increase to 8 mtpa. Normally used to create fertilizers, ammonia also offers a low-carbon fuel that might be burned to create energy.

According to a spokeswoman, JERA is looking at numerous locations along the Gulf Coast for the hydrogen, ammonia, and CCS plant, which will be partially powered by JERA’s U.S. renewable energy operations.