Location-specific techno-economic assessment of gray hydrogen production utilizing existing natural gas networks

Abstract

As natural gas (NG) serves as a critical bridge fuel for the global hydrogen economy, regional volatility in feedstock pricing and composition presents a universal challenge for infrastructure investment. This study proposes a replicable methodological framework for the location-specific techno-economic assessment of decentralized gray hydrogen production. Using the diverse Brazilian natural gas network as a representative case study for emerging markets, the approach integrates process simulation (Aspen HYSYS) and economic modeling (APEA) with rigorous sensitivity analysis. A 240 t/d steam methane reforming (SMR) plant was assessed to quantify how heterogeneous regional specifications impact profitability. The results demonstrate a localized Levelized Cost of Hydrogen (LCOH) ranging from 0.96 to 1.74 US$/kg H₂, identifying optimal investment hubs where profitability is achieved within 3 to 5 years. By focusing on location-specific dynamics rather than fixed regional boundaries, this research provides a generalizable blueprint for stakeholders to minimize risks and optimize hydrogen deployment in any region characterized by non-uniform gas markets.