01/12/2021 – Energy / Decarbonisation / Baker Hughes / Shell / MoU / Collaboration / Net-Zero
Baker Hughes inks deal with Shell for green energy credits and co-investments in decarbonisation
Energy technology company Baker Hughes and energy major Shell have signed a broad strategic collaboration agreement to help each other achieve their respective commitments for net-zero carbon emissions, and also advance tech to decarbonise energy and industrial sectors.
The new MoU intends to build on the existing relationship between Shell https://www.shell.com/ and Baker Hughes in a number of key areas:
• Shell will initially provide selected Baker Hughes US sites with power and renewable energy credits, and the companies will negotiate renewable power for Baker Hughes’ sites in Europe and Singapore.
• Shell and Baker Hughes also agreed on a broader collaboration to identify other opportunities that can accelerate each other’s transition to net-zero carbon emissions by 2050, such as Baker Hughes providing low-carbon technology solutions for Shell’s LNG fleet.
• The two companies will further explore potential opportunities to co-invest and participate in new models to decarbonise energy and industrial sectors.
“The urgency around the energy transition requires collaboration”
“Our agreement with Shell is another example of how we are collaborating in new ways to meet net-zero targets for our company and for our customers,” said Lorenzo Simonelli, Baker Hughes chairman and CEO. “The urgency around the energy transition to meet Paris Agreement goals requires collaboration to accelerate actionable steps to reduce emissions in various ways.”
Harry Brekelmans, Projects & Technology Director at Shell, added: “Shell and Baker Hughes both have clear ambitions to decarbonise and have already made progress through technical innovations. I’m proud of the work that has been done so far, and with this new agreement, we are taking it one step further. It will enable us – and our partners – to push the boundaries of what can be achieved and move even closer toward our net-zero targets.”
Power agreement for certain Baker Hughes sites
As a first step in the collaboration, the parties seek to finalise Shell’s supply of certain Baker Hughes US facilities with power and renewable energy credits for a two-year period. In 2021, Baker Hughes’ global renewable electricity consumption was 22 per cent, and with this agreement, it is expected to grow by 2 per cent to reach 24 per cent annually.
Shell and Baker Hughes will also negotiate supply of up to 100 GWh of renewable power for Baker Hughes’ facilities in Europe and explore the development of an on-site solar solution for Baker Hughes’ chemical blending plant in Singapore.
Other solutions to meet the firms’ net-zero carbon emissions targets
Shell and Baker Hughes will further collaborate to explore additional opportunities to help Baker Hughes accelerate its transition to net-zero carbon equivalent emissions, including Shell providing low-carbon transportation and fuel solutions for Baker Hughes.
In turn, Shell will evaluate opportunities for Baker Hughes to provide low-carbon solutions for Shell’s LNG fleet through technology upgrades and compressor re-bundles. Baker Hughes will also help Shell develop digital solutions to accelerate decarbonisation across Shell’s global assets and operations.
New collaborative models to decarbonise energy and industrial sectors
In addition to advancing each other’s own emissions reductions, Shell and Baker Hughes will collaborate to explore opportunities to offer solutions for hard to abate industries globally.
The two firms have already achieved important results through their long-standing relationship, including:
• Baker Hughes was the first supplier to participate in Shell’s ‘Supplier Energy Transition Hub’ – a key collaboration and co-learning platform where suppliers define and estimate their emissions reduction ambitions while learning from other industry experiences.
• Under the Open AI Energy Initiative (OAI), Baker Hughes helped Shell develop and bring to market solutions to accelerate decarbonisation across Shell’s assets and the wider industry.
• The two companies also introduced VitalyX, a digital lubrication oil monitoring system using the latest digital technologies to ensure the uptime, performance, and optimisation of a customers’ marine fleet.
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