Chevron New Energies has acquired Magnum Development LLC—the company working alongside Mitsubishi Power Americas Inc. to develop a massive hydrogen and energy storage project called Advanced Clean Energy Storage in Delta, Utah (ACES Delta), the energy company said Sept. 12.

With the purchase of Houston-based private equity investment firm Haddington Ventures’ 78% stake in the project, Chevron will become the majority owner of what has been called the world’s largest hydrogen production and storage facility.

The deal, for which the financial terms have not been disclosed, came as Chevron aims to grow a large-scale hydrogen business, adding to existing assets that produce about 1 million tonnes per year of hydrogen.

“We seek to leverage the unique strengths of each partner to develop a large-scale, hydrogen platform that provides affordable, reliable, ever-cleaner energy and helps our customers achieve their lower carbon goals,” Austin Knight, vice president of hydrogen for Chevron New Energies, said in a news release.

Used mostly today in oil refining and the production of ammonia for fertilizer, hydrogen—which had near-zero greenhouse gas emissions—is seen as key to helping lower global emissions to slow global warming. Hydrogen can be used for energy storage as well as to power fuel cells, generate electricity and serve as a transportation fuel, displacing carbon-emitting fossil fuels.

ACES Delta will initially convert more than 220 megawatts (MW) of renewable energy into 100 metric tonnes per day of green hydrogen to be stored in two gigantic 4.5-MMbbl salt caverns. The caverns, owned and controlled by Magnum, will store hydrogen, providing long-duration energy storage that can be dispatched when needed to the grid.

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The project is expected to start commercial-scale operations in mid-2025, providing fuel via pipeline for Intermountain Power Agency’s (IPP) 840-MW combined cycle gas turbine power plant adjacent to the ACES Delta hub.

IPP’s Renewed Project is set to replace a retiring 1,800-MW coal-fired power plant, a move the U.S. Department of Energy (DOE) has said is estimated to help prevent more than 126,500 metric tons of CO2 emissions annually.

The IPP Renewed project’s gas turbines will run on 30% hydrogen fuel at startup in 2025, but Mitsubishi aims to increase that percentage to 100% by 2045.

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The project will serve as a “blueprint for future hydrogen opportunities,” Michael Ducker, senior vice president of hydrogen infrastructure for Mitsubishi Power, said of ACES Delta.

Mitsubishi is providing hydrogen equipment integration, including the 220 MW of electrolyzers, gas separators, rectifiers, medium voltage transformers and a distributed control system for ACES Delta.

“With Chevron New Energies’ involvement, we expect to expand hydrogen supply more quickly,” Ducker said. “Together, we are investing in the future of hydrogen, helping to create a viable, cost-competitive market for emerging lower carbon solutions.”

Haddington Ventures, which focuses on companies in the hydrogen hubs, energy storage and critical minerals sectors, has been the primary financial sponsor of the project since 2008, according to John Strom, managing director, Haddington Ventures. ACES Delta also secured a $504.4 million loan guarantee from the DOE in 2022.

“We believe this transaction will accelerate lower carbon intensity solutions that reduce emissions in the western United States,” Strom said. “Haddington Ventures will remain committed to the success of ACES Delta through its role in management of the investment vehicle that is providing construction equity to the current project.”

Citigroup Global Markets Inc. served as financial adviser to Chevron. Jefferies LLC served as financial adviser to Haddington.