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Woodside Energy has taken a major step in its H2Perth hydrogen project, moving from years of planning to active construction. The Australian energy company confirmed this week that its Hydrogen Refueller facility will begin operations in the second half of 2026, following the completion of cold commissioning and leak testing. This milestone marks the start of a deliberately staged production ramp that Woodside is using to manage procurement risk while scaling toward a full $1 billion hydrogen hub in Western Australia.
The company began evaluating hydrogen investments in 2020 as part of its broader business diversification strategy. Six years of procurement decisions, supplier negotiations, and technology assessments are now being put into practice. The first facility, the Hydrogen Refueller, will initially produce 235 kilograms of hydrogen daily, with the ability to scale up to 1,000 kilograms as demand and capital flows grow. Woodside states that this modest start is intentional: it allows the team, suppliers, and potential customers to gain operational experience before the project expands to its full capacity. This phased approach is explicitly designed to reduce procurement risk for equipment and materials in later stages of the hub development.
Phased Ramp-up Reduces Equipment and Supplier Risk
Cold commissioning procedures have tested all equipment, control systems, and safety processes before hydrogen is introduced into the plant. The facility will produce both liquid hydrogen and ammonia, targeting heavy transport applications such as trucks, cars, and transport trailers. Woodside plans to introduce hydrogen into the system during the autumn of 2026, with the first production load expected around the same time.
To produce hydrogen, the Hydrogen Refueller will use a 2.6-megawatt electrolyzer. Electrolysis splits water into hydrogen and oxygen using electricity. When powered by renewable electricity, the resulting hydrogen is classified as “green hydrogen.” This contrasts with the more common “grey hydrogen,” which is produced from natural gas and carries significant emissions. Woodside says the site will operate with net-zero Scope 1 and Scope 2 greenhouse gas emissions from the start, using renewable electricity throughout its operations.
Project Cost Exceeds $1 Billion, Exports Planned
According to Woodside, the full H2Perth production hub will cost more than $1 billion to build. The Hydrogen Refueller represents the first phase of this investment, with capital deployment aligned to market demand. The phased approach gives suppliers and contractors the chance to gain experience before the project scales to full capacity. Woodside has explicitly framed this as a risk reduction strategy for equipment procurement as the hub expands.
The complete H2Perth project is scheduled for completion around 2030. Reports indicate the facility is designed to produce 30,000 tonnes of liquid hydrogen annually for export markets, a massive increase from the Refueller’s initial output. Woodside has signed a conditional offtake agreement with Keppel, a Singaporean asset manager, which intends to use the hydrogen in its data center portfolio. This deal gives Woodside a potential customer before full production begins, and the agreement could inform further investment decisions and supplier contracts as the project progresses.
Industry Skepticism on Hydrogen in Road Transport
Not all analysts are convinced that hydrogen will play a major role in road transport. Michael Liebreich, founder, chair, and CEO of Liebreich Associates, ranks long-distance trucking in the D tier of his Hydrogen Ladder. He argues that electrification offers a simpler and cheaper path for road freight. “By 2030 it will be abundantly clear that the large majority of road freight will end up electrified,” he said on LinkedIn in 2024. Liebreich wrote in Bloomberg in 2022 that electric vehicles already compete with petrol and diesel on a total cost of ownership basis, while “e-fuels, by contrast, will still be three to five times as expensive in 2050, driven by their production complexity and the efficiency losses at each production stage.”
Woodside maintains that H2Perth will serve hard-to-abate sectors such as heavy trucking and local industrial operations, where electrification is less straightforward. Whether that demand materializes will determine whether the phased procurement approach pays off for suppliers and offtake partners.
Value-Add: Exclusive Perspective on Phased Procurement as a Model for Hydrogen Developers
Woodside’s strategy stands out in the hydrogen sector, where many large-scale projects have struggled with cost overruns and supply chain delays. By starting small and scaling incrementally, Woodside is effectively using the Hydrogen Refueller as a pilot plant that also serves as a commercial facility. This approach reduces the risk of committing to expensive equipment before verifying performance and demand. According to industry experts, such phased procurement is becoming more common among green hydrogen developers, particularly in regions with uncertain off-take markets. The U.S. Department of Energy has also advocated for similar “learning-by-doing” approaches in its hydrogen hub funding programs. If Woodside’s H2Perth succeeds, it could serve as a blueprint for other developers in Australia and beyond, including those bidding for U.S. hydrogen hub grants. The project’s ability to secure a conditional off-take agreement with Keppel—a data center operator—also highlights a growing intersection between hydrogen supply and the energy-intensive digital economy.
As of May 2025, Woodside continues to advance the H2Perth project with a clear focus on risk management and phased execution. The next 18 months will be critical as the Hydrogen Refueller begins actual hydrogen production and the company decides whether to move forward with the full $1 billion hub. For suppliers and contractors, the ongoing procurement cycle offers a steady stream of opportunities, but the ultimate payoff depends on whether hydrogen demand in heavy transport and industry materializes as projected.
