The Saudi Arabian Oil Company is Considering a Green Hydrogen Investment

green hydrogen investment
green hydrogen investment

Aramco is beefing up its support toward green hydrogen investment aimed at cutting down on carbon emissions. Saudi Arabian oil company made five preliminary agreements with various businesses to investigate the feasibility of developing hydrogen and green ammonia projects. The Kingdom of Saudi Arabia is committed to becoming carbon-free by 2060. KSA also has made a green hydrogen investment in NEOM city, where the Kingdome is constructing one of the world’s most significant green hydrogen projects.

The Kingdom of Saudi Arabia hopes to become a major supplier of hydrogen as the energy sector worldwide moves toward greener fuels. KSA plans to export clean fuel to Europe if it is economically viable. Renewable energy is in great demand. The Kingdom’s $5 billion worth of green hydrogen project has begun construction and is on target to be completed in 2026 as planned.

Saudi Arabia’s Green Hydrogen Production: The Lowest Production Cost Ever

Due to its abundant natural gas, oil, and land, Saudi Arabia is in a prime position to become a global leader in the green hydrogen sector. There is a wide price range for hydrogen globally, from $2 to $7 per kilogram. Natural gas and renewable power rates put the Kingdom on the cheaper end of the cost spectrum. The price of eco-friendly hydrogen fluctuates widely depending on the price of renewable power and the load factors of electrolyzers. KAPSARC evaluates how Saudi Arabia’s hydrogen production may affect the country’s resources, exports, and costs.

Aramco Sets Huge Bets On Blue Hydrogen

Blue hydrogen has attracted the attention of Aramco. State oil producers in the Gulf region, such as Aramco and Adnoc of the United Arab Emirates, are aiming to produce blue hydrogen to promote alternative energy sources. Both the UAE and KSA want to increase their hydrogen exports by capitalizing on their preexisting ties to customers established through their trade of crude oil. Aramco and SABIC teamed together to send the first cargo of blue ammonia, a hydrogen transporter, from Saudi Arabia to Japan in 2020. Around 40 tons of high-quality blue ammonia were sent for carbon-free electricity production.

Towards A Sustainable Energy Future: Hydrogen As A Crucial Source Of Energy

Burning hydrogen produces no greenhouse gases, making it a promising fuel source for a clean energy future. Aramco is investing heavily in blue hydrogen, which is created the same way as conventional hydrogen from natural gas but with emissions controlled and either saved or reused. Blue hydrogen’s popularity will soar in the coming decades due to its lower production costs, according to Saudi Aramco. By 2050, the IEA predicts that worldwide demand for hydrogen will amount to 18 million BOE.

Last Updated on January 28, 2024 by News Editor

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