The state government of Western Australia is seeking to lure investment from Japanese firms for a huge $50bn hydrogen facility after BP exited the project, local media The Financial Review reported on August 18.

People familiar with the matter have told The Financial Review that discussions have been held with a handful of energy companies from Japan in an effort to rescue the project.

The proposed megaproject consists of seven smaller projects of wind and solar energy that together would produce 26 GW of renewable energy that would be used to produce green hydrogen, which would be exported as ammonia.

Located in Western Australia’s Pilbara region, the project envisions the development of over 1,700 wind turbines and 18 arrays of solar panel, which would each generate 600 MW.

However, the project has encountered a major roadblock with British energy firm BP controversially announcing its withdrawal from the project in July. BP is believed to have become concerned with the lack of offtake agreements reached with local industry in the region, and the limited support from the Western Australia government.

With local customers pushing back the timelines for when they wanted the offtake agreements to begin, BP stated that the project no longer made sense given its tight timelines identified for the project to be viable.

BP held a majority 64% stake in the project. Singapore headquartered InterContinental Energy holds a 26% interest, while Serbia-based CWP Global possesses the remaining 10% share.

Japanese energy firms have long been involved in developing energy projects in Australia, with the East Asian country importer significant volumes of liquefied natural gas.

Meanwhile, Japan has also been a key player behind the development in Victoria state of a brown coal-based hydrogen project, which finished a pilot phase in 2022, but has since stalled. The project had targeted to produce 30mn tonnes of hydrogen from the gasification of brown coal.

Resource-poor Japan is heavily dependent on energy imports. However, the country is also seeking to shift and add more renewable energy to its mix with a net-zero target of 2050 and an interim goal of reducing greenhouse gas emissions by 60% by 2035.