Hydrogen is poised to become a pivotal force in decarbonization, gaining momentum rapidly. Depending on its source, hydrogen comes in several flavors. Green hydrogen is produced using electricity from renewable sources, while gray hydrogen is derived from hydrocarbons. A third, lesser-known source is natural hydrogen, which is trapped deep underground. Spain is set to host Europe’s first well tapping into underground water to access natural hydrogen. This development could position the country as a leading supplier of sustainable hydrogen in Europe.
Helios Aragón PTE, the Spanish arm of the global oil company BP and its partner Axion, plans to extract natural hydrogen and helium, two gases that are rare near the Earth’s surface. Two underground reservoirs lie near Monzón and Barbastro in Aragón. The company has raised a 900 million euro investment to begin extraction by 2028, aiming to establish Europe’s first natural hydrogen hub and generate about 300 direct, high-quality jobs and 1,500 indirect jobs.
Despite its promise, the project faces a major challenge: current Spanish climate legislation. Hydrogen, when conceived as an element separate from carbon, is not treated as a hydrocarbon by chemical definition, but rules in Spain classify its extraction as hydrocarbon activity. Exploration and exploitation of hydrocarbons has been restricted since 2021. As a result, the plan is to seek inclusion of natural hydrogen within the Spanish Mining Code, a move France has recently pursued.
Competitive pricing
Gold hydrogen is valued for its scarcity in pure form and is often produced from other substances. Market analysts estimate its price around 0.75 euros per kilogram, while green hydrogen produced from surplus renewable energy often ranges from 7 to 8 euros per kilogram.
News of natural hydrogen in the Pyrenees has attracted investor interest. The reserves cover roughly 90,000 hectares, with Helios Aragón PTE holding permits for about 60,200 hectares. Natural hydrogen has been little utilized in Europe or Spain until recently, which helps explain the lack of a tailored regulatory framework. Legislation distinguishes hydrogen as a non-hydrocarbon substance, aligning it with basic chemical definitions rather than oil-and-gas concepts.
In May, surveys at the Monzón-1 well reported zero hydrocarbons, a detail cited by Ian Munro, CEO of Helios Aragón, in an interview with El Periódico de Aragón. The well reaches a depth of 3,500 meters. A new exploration phase is planned for 2024, contingent on regulatory permissions, with a second well under consideration.
Rare occurrences of hydrogen and helium may be complemented by a small helium reserve in the Pyrenees. Recent studies suggest helium could account for up to 4% of the total gas from this natural reservoir. Helium remains a highly sought-after commodity due to price surges over the past five years, often exceeding hundreds of percent increases compared with natural gas. Spain currently has no large-scale helium production, though about 10% of the national industry uses helium for critical applications like scanners.
Conventional extraction methods
Ian Munro notes that hydrogen and helium could be extracted using traditional oil-and-gas techniques. He emphasizes that hydraulic fracturing, or fracturing, which is banned in Europe and Aragón since 2012, would not be necessary. Hydrogen and helium are light gases that do not require additional pressure to rise. The company has revisited earlier research from 1963 that suggested significant hydrogen and helium potential in the Pyrenees. Regardless, the chief executive promises a minimal environmental impact, with operations designed to blend into the local economy.
The program is currently in its second phase, covering 2023 and 2024. It plans environmental assessments, well approvals, and the drilling of an exploration well, with resource scope confirmed. An initial investment of 14 million euros is planned for this stage, with total program investments estimated around 900 million euros, contingent on regulatory approval.
Company research indicates the Pyrenean reserve could hold about 500 billion cubic meters of recoverable gas. Translated, the project’s useful life could run for about 20 years.
As natural hydrogen is drawn from the reserve, the site may also function as a storage hub for green hydrogen produced during times of renewable surplus. Green hydrogen remains competitive yet challenged by high costs and storage difficulties. By 2048, when the project reaches commercial scale, access could be limited to those with established infrastructure.
The Spanish industrial sector consumes about 500,000 tons of hydrogen annually, supporting a hydrogen production industry valued at roughly 1.25 billion euros. Hydrogen serves a broad range of uses, from removing impurities in refineries to providing feedstocks for ammonia, methanol, fertilizers, biofuels, and plastics, as well as acting as a heat source to replace coal in various chemical and metallurgical processes.
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Notes: regulatory developments are ongoing, and local authorities continue to assess environmental impacts and economic viability. All projections remain contingent on legislative alignment and successful permitting processes (sources: industry reports and regional updates).