Saudi Arabia is turning to Germany to explore opportunities in hydrogen as the Kingdom is vying to be one of the largest players in the fuel of the future.
The Saudi Cabinet last night approved a memorandum of understanding between the Ministry of Energy and Germany’s Federal Ministry of Economic Affairs and Energy to explore opportunities in the hydrogen field, state news agency SPA said on Tuesday.
This agreement comes at a time when state-owned energy giant Saudi Aramco is planning to expand in production of blue hydrogen, while the futuristic project of NEOM is working on producing its first green hydrogen in 2025.
Although the agreement was signed yesterday, Germans were heavily involved and active over the past two years with Saudi counterparts on hydrogen discussions. NEOM has already a team of Germans leading its hydrogen unit, with Peter Terium, a Dutch energy executive and former Chief Executive Officer of innogy and RWE, as head of its energy sector.
Saudi Aramco said on Monday that it is looking for off-take agreements for blue hydrogen in its key markets to expand its output and sees strong potential for growth. Aramco is talking to potential buyers in Japan and South Korea, which it says will be major markets for the fuel, CEO Amin Nasser said on an investor call.
Blue hydrogen uses the traditional Haber-Bosch method of turning natural gas into hydrogen but captures the carbon emissions, while green hydrogen is created with renewable energy and water.
Hydrogen is converted into ammonia for long-distance transportation.
In September last year, Saudi Aramco and Japan’s Institute of Energy Economics (IEEJ) announced the first shipment of blue ammonia from Saudi Arabia to Japan.
The shipment, which was in partnership with Saudi Basic Industries Corporation (SABIC), contained forty tons of high-grade blue ammonia, and is meant for use in zero-carbon power generation.
Nasser also said on Monday Saudi Aramco is in talks about renewable investments with the nation’s wealth fund PIF and Acwa Power.