In separate statements yesterday morning, the chemical giant and the energy company unveiled their intentions under the banner "Hunter Valley Hydrogen Hub".

The federal and NSW governments both welcomed the initiative, while noting an Orica/Origin hydrogen hub would be a separate project to government initiatives with similar names.

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The two companies said the basis of the announcement was a memorandum of understanding to undertake a feasibility study into producing "green hydrogen" from a 55-megawatt electrolyser.

Orica's ammonium nitrate plant relies heavily on gas, with a spokesperson saying the Kooragang facility accounts for 10 to 15 per cent of the state's gas consumption every year.

Kooragang's ammonia plant heats the pressurised gas to produce hydrogen feedstock, and at least some of the resulting carbon dioxide is sold, supplying about half the state's needs.

Taking hydrogen from an electrolyser would reduce the Kooragang plant's greenhouse gas emissions, with Orica CEO Sanjeev Gandhi saying the partnership with Origin aligned with its ambition to cut those emissions by 40 per cent by 2030, and to reach "net zero" by 2050.

Origin CEO Frank Calabria said he doubted Australia could reach "net zero" emissions by 2050 without all players working together to "support the development of hydrogen as a future energy source".

Origin said if the plant went ahead it could be expanded in stages enabling potential hydrogen exports. Domestically, it would investigate the feasibility of converting the gas network to hydrogen.

In its statement, Orica referred to "blending hydrogen into natural gas pipelines", but there was no detail from either organisation - beyond their two-page press releases - outlining such basics as the amount of money to be spent on the study, its likely timing or whether the two companies were seeking state or federal assistance from any of the various energy transformation funds.

Although hydrogen itself is a "clean" energy source, it does not occur naturally and takes considerable energy to produce.

At best practice efficiency of 70 per cent to 80 per cent it takes about 50 to 55 kilowatt-hours of electricity to produce one kilogram of hydrogen.

Producing this from coal-fired electricity is "blue" hydrogen but it takes renewably generated power to reduce the carbon footprint for "green" hydrogen.

Both companies acknowledged that the commercialisation of green hydrogen is some time away and they stressed that the feasibility was a first step in deciding whether such a path was feasible.

A November 2021 hydrogen report from the International Energy Agency - subtitled "more effort needed" - said 10 governments adopted hydrogen strategies during 2020, and that "close to 70 megawatts of electrolysis capacity was installed, doubling the previous year's record" but falling "well short of what is needed" to achieve net-zero by 2050.

The first stage of the Kooragang plant, if built, is proposed to be 55 megawatts.

Federal Energy Minister Angus Taylor said the Morrison government understood the Hunter's "clean hydrogen potential", aided by its existing energy resources, skilled workforce and export-enabling port.

The Commonwealth was not involved in the Orica/Origin announcement but provided half of the $3 million needed for a Port of Newcastle hydrogen hub feasibility study unveiled in November.

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