Ofgem Backs £164m Advance in UK Hydrogen Infrastructure Project

In a major boost for the UK’s hydrogen infrastructure, Ofgem signed off on £164 million on 14 November 2025 to propel National Gas’s Project Union into its next stage. This cash injection shifts the scheme from early scoping into full-on engineering design (FEED) and readies the regulatory groundwork. By repurposing existing high-pressure pipelines, it’ll stitch together Britain’s key industrial and production hubs.

Main Takeaways

• It’s covering FEED on three core pipeline sections, lighting the fuse on Project Union’s next phase.
• Corridors will link St Fergus, Teesside, the Humber, Grangemouth, North West England and South Wales.
• By repurposing high-pressure lines, it keeps CAPEX low and cuts down environmental disruption.
• It could spark over 3,100 construction jobs and pump roughly £300 million into annual GVA while supercharging industrial decarbonization.
• Groups like Hydrogen UK and RWE call it vital for hitting the 2030 hydrogen targets and bolstering energy security.

Engineering Design Takes Shape

The funding is earmarked for the Front End Engineering Design (FEED) phase on three vital legs of Project Union. These deep-dive studies will:

• Pin down pipeline routing and technical specs
• Set pressure ratings, materials choices and safety protocols
• Outline environmental mitigation measures and permitting needs
• Deliver firm cost and schedule estimates before construction kicks off

Locking in FEED funding is a proven way to de-risk big infrastructure projects, giving all parties a clear roadmap on budget and timing before shovels hit the ground.

Strategic Implications for Decarbonization

Project Union sits at the heart of the UK’s push for industrial decarbonization. Once up and running, the network will:

• Move low-carbon green hydrogen from electrolyser sites and CCUS-linked reformers to heavy industry and power plants
• Help steel, refining and chemical sectors in Teesside, the Humber and Grangemouth slash CO₂ emissions
• Create a resilient national backbone that plugs into offshore wind, sustainable energy projects and carbon storage hubs

Financing and Collaboration

Ofgem’s approval underlines the regulator’s shift toward backing hydrogen infrastructure as part of the UK Government’s net-zero playbook. With public funding de-risking early phases, National Gas expects private capital to follow, since lower transport costs and resilient supply chains are vital for scaling hydrogen production. Industry bodies like Hydrogen UK welcome the move, pointing to cost savings and stronger supply resilience as game-changers.

Looking Ahead

With FEED under way, Project Union is aiming for full construction permits by 2026–27 and operational readiness in the early 2030s. It’s shaping up as a European blueprint for rolling out cost-effective hydrogen networks at speed. That said, with material and labour markets tightening, securing long-lead equipment and grid connections will be the name of the game over the coming months.

About National Gas

National Gas operates the UK’s high-pressure gas transmission network and is leading the charge to adapt it for hydrogen transport. Project Union is the centerpiece of its hydrogen strategy, linking production, storage and demand centres to turbocharge the UK’s clean energy transition.