Severstal sees hydrogen supporting pipe demand

European large diameter steel pipe demand will be boosted from 2024 by the development of hydrogen transportation infrastructure, Russian integrated steelmaker Severstal said today.

The company hopes to deliver pipes suitable for transporting hydrogen in the next couple of years. The chemical properties of the gas make it unlikely that current pipes can safely transport it for long periods of time, director of energy sales and business development, Dmitry Goroshkov, said.

Energy companies are studying whether they can use existing pipes to transport a mixture of methane and hydrogen that can be separated at the point of destination or insulate current pipes to protect them from hydrogen. Goroshkov said it is likely that the infrastructure will involve a mixture of existing pipelines that have been adapted, and new pipes specifically designed to handle hydrogen. While several thousand kilometres of pipelines will be needed to transport hydrogen, the impact on steel demand depends on how much of the existing network is adapted, he added.

Almost 70pc of Severstal's sales to the energy sector are related to oil and gas transportation, but the company sees the growing importance of renewables, such as wind power. It completed its first trial sale of thick plate to be used in the structure of an offshore wind tower in the last few months. Offshore wind turbines are larger than onshore units, so have more demanding requirements. The company sees manufacturers of wind towers globally — and especially in Europe — as a big opportunity. It supplies almost 100pc of the steel for wind towers built in its domestic market.

Severstal has also increased exports of large-diameter pipes, a key and premium offering for the company. It will export 60,000t of large diameter pipes this year — 25pc of all sales — compared with just 24,000t last year. Demand is already recovering from the pandemic and will be supported next year by high energy prices, which have helped projects that were delayed during the pandemic to restart. Development of liquid natural gas infrastructure and the development of new oil and gas fields are also supporting demand. Large-diameter pipe demand could reach peak consumption within Russia by 2023-24 as national energy companies restart investments in fields and pipelines, Goroshkov said.

Severstal is looking to certify the carbon content of its steel for sale into the EU, and in the short-term is looking to reduce its carbon emissions by 3pc by 2023 compared to 2020, and 10pc by 2030.

By Colin Richardson