Middle East Rising: Project Hydrogen

It is important to appreciate that the Oil and Gas which Saudi Arabia, Qatar, Kuwait, and the UAE possess in abundance have served as the backbone of a collective economy and an energy powerhouse for the Middle East. The idea of abandoning fossil fuels is perhaps one of the insurmountable challenges facing the region but they have risen to the occasion and taken proactive steps, conscious that they must rethink their decision-making on hydrogen to maintain their global rankings as energy leaders. According to Energy Connects, There is clear evidence across the region of buy-in to hydrogen’s potential, epitomised by Saudi Arabia’s aim of becoming a leading global supplier of hydrogen.

Should one take a broad overview, there are plans already in motion for a multi-billion dollar production plant in the northwestern regions, with a proposed daily production target of 650 tonnes of green hydrogen, which are further planned to be on stream by 2026.

This is an ever-changing dynamic, subject to changes given the demand and supply apart from the re-write of projections for global green hydrogen capacity in the foreseeable future. This is a clear indicator of market dynamism, driven by an ever-evolving understanding of the opportunities that green hydrogen has to offer.  An abundance of natural resources is critical to the region given the established solar and wind energy projects and, in particular, the low cost of solar energy, which means it has a strong advantage in the cut-throat competition on being able to produce green hydrogen from ready sources.

To put this into perspective, we narrowed down the Major Hydrogen Projects that seek to change the hydrogen landscape of the Middle East. These are projects and initiatives that are either underway or ready to begin.

Kingdom of Saudi Arabia

The US-based Air Products & Chemicals, also an industrial gas giant has announced its plans to build a green hydrogen plant in Saudi Arabia which will be powered by 4 gigawatts of wind and solar power. If successful this will be the world's largest such project.

This entire project will run on 100% renewable power and will be co-owned by three partners with equal stakes - Air Products, Saudi Arabia's ACWA Power, and Neom.

NEOM is the kingdom’s brainchild, a mega-city that has been planned near Saudi Arabia’s borders with Egypt and Jordan whose goal is to produce 650 tonnes of hydrogen daily using ThyssenKrupp electrolysers and 1.2 million tonnes per year of green ammonia using Haldor Topsoe technology. Nitrogen is a contribution of Air Products through its air separation technology. The fuel is said to be further shipped as ammonia to end markets and later converted back to hydrogen. Ammonia production is expected to start in 2025.

According to sources, in addition to the US$5 billion plant, this project will require US$2 billion of new distribution infrastructure and that will be owned by Air Products.

With NEOM the Kingdom of Saudi Arabia seeks to change global perception and rise as a new world leader in the energy markets.

The KSA is not alone. Other Middle East countries are also nurturing the same dream. The UAE is a glowing example here.

The United Arab Emirates

The UAE's green hydrogen project was inaugurated at the Mohammed bin Rashid Al Maktoum Solar Park in Dubai in 2021. “Through this pilot project, the Dubai Electricity and Water Authority, DEWA aims to demonstrate the production of green hydrogen from solar power, its storage, and re-electrification. This is a system that allows for buffering renewable energy production, both for fast response applications, as well as for long-term storage. The plant has been built to accommodate future applications and test platforms for the different uses of hydrogen, including potential mobility and industrial uses,” said HE Saeed Mohammed Al Tayer, MD, and CEO of DEWA. This project, which was constructed in collaboration with Dubai Electricity and Water Authority, Expo 2020 Dubai, and Siemens Energy, is also the first solar-driven green hydrogen producing facility in the MENA region.

Another important development in the country is the recent announcement by South Korea in the UAE.  South Korea's Korea Electric Power Corporation, Samsung C&T Corporation and Korea Western Power, and the UAE's Petrolyn Chemie companies are all set to build a US$1 billion green hydrogen and ammonia production plant in Khalifa Industrial Zone Abu Dhabi (KIZAD).

“Korea Electric Power Corporation (015760.KS), Samsung C&T Corporation (028260.KS), and Korea Western Power, alongside the UAE's Petrolyn Chemie, will build a plant that can produce up to 200,000 tonnes of green ammonia a year,” Petrolyn said.

Green hydrogen will be sourced out through the water to split the element from oxygen as they seek to cut greenhouse gas emissions. It is reported that the plant will be built in two phases in the KIZAD Industrial Area near the capital Abu Dhabi, with the first phase producing 35,000 tonnes after which the second phase would evolve into full-scale production.

"Participating companies will achieve their respective Net-Zero vision through the Project. They are expected to...expand the drive of future growth in the global green hydrogen market by expanded reproduction of their future business model," Petrolyn said.

Upping the international game, ADNOC – the Emirates’ largest energy company is to buy off a 25% stake in the design stage of British Petroleum’s blue hydrogen project, H2Teesside. This is a huge development given that it is ADNOC’s first investment in the UK. BP and ADNOC will now jointly advance the project work on design, finally working on the pre-FEED stage. H2Teesside is expected to kickstart the UK’s hydrogen economy at scale with the development of two 500MW hydrogen production units by 2030. The project is targeting 2027 to commence its operations.  UK Minister for Investment, Lord Grimstone is reported to have said: “This deal will help us supercharge clean growth by harnessing the expertise of the UK’s renewable energy sector.

Given the current rat-race in the sustainability sphere UAE and neighbour Saudi Arabia are also engaging in a healthy hydrogen rivalry.

Egypt

As the two neighbours engage in economic competition, nearby Egypt has also decided to enter the fray with another series of ambitious projects. Egypt’s pipeline for green hydrogen projects ranked at number 3 only at par with Australia and Mauritania, currently stands at 11.62 gigawatts (GW), equivalent to over 1.57 million tons of green hydrogen. Estimated costs for the project stand at US$20 billion. While there is no accurate date for its commencement, the Egyptians have kept 2035 as their target, according to Rystad Energy research.

International developers in Egypt have found favorable reasons to invest in the country including its location, natural gas infrastructure, liquefaction facilities, bunkering market, and marine ports, as well as the high solar and wind potential. Egypt is also close to markets like the European Union which is currently also in the quest for the production and distribution of Hydrogen.

According to Rigzone, The government of Egypt plans to release a US$40 billion national hydrogen plan in the coming months, recognizing the importance of production, storage, and export and import of green hydrogen and ammonia under its economic development strategy and allowing for state support and tax incentives.

It must be highlighted that the high degree of flexibility in terms of the process of establishing, operating, and managing hydrogen projects has been simplified, requiring a single permit, which is an incentive for both domestic and international investors. Additional incentives on import-export and land allocation are also in place.

“Egypt has all the prerequisites to become a green hydrogen giant – fantastic renewable potential, space for mega projects, and construction expertise. The US$40 billion in planned investments by the Egyptian government demonstrates commitment and will bring further foreign investment. Sitting between three continents and with the Suez Canal carrying approximately 12 percent of all the seaborne freight in the world, Egypt can supply renewable energy near and far. The domestic market will benefit too as the Egyptian agriculture sector can look forward to being one of the greenest when it comes to fertilizer use,” says Minh Khoi Le, Head of Hydrogen at Rystad Energy.

Current legislative practices are simplifying the legal processes which would further enhance the Egyptian economy.

In terms of projects, Egypt has been more forthcoming in delineating and discussing its ventures in public which include French utility EDF and ZeroWaste which signed an MoU with Egypt's Suez Canal Economic Zone to produce 350,000 tons of green fuel annually in the Ain Sokhna region for ships, vessels, and tankers crossing the Suez Canal.

According to reports, “The project’s first phase will produce 140,000 tons of green ammonia using close to 25,000 tons of green hydrogen from desalinated seawater and renewable energy as feedstock. Commissioning is scheduled for the first quarter of 2026. Capacity will then gradually increase to 350,000 tons of green ammonia production per year. The project will involve a total investment of US$3 billion”.

AMEA Power, a subsidiary of Al Nowais Group, has recently signed an MoU with the Suez Canal Economic Zone to produce 390,000 tons of green ammonia per year in Ain Sokhna for export purposes. In addition, Norway’s Scatec has been commissioned to produce a US$5 billion green hydrogen and ammonia facility in Suez.

Scatec inked an MoU with the General Authority of the Suez Canal Economic Zone for the project, which will be capable of producing 1 million tons of green ammonia annually, with a posited threefold increase over time. This green ammonia is slated to hit EU and Asian markets.

Almost 80 percent of the green hydrogen projects in Egypt are planned in the Suez zone, which has played as a global logistics hub even historically. This time the plan is to be a bridge for European, African, and Asian markets.

Seven projects announced for the region are set to have a combined capacity of 10.76 GW, meaning an output of over 1.5 million tons of green hydrogen.

Oman

Oman’s hydrogen goals are also expanding. The country aims to build a hydrogen-centric economy by 2040.

“The potential for clean hydrogen, including the green and blue versions, is around 1GW by 2025, 10GW by 2030 and around 30GW by 2040 — this is how we see the growth of hydrogen in Oman. This growth will be explained and reflected in the [national] hydrogen strategy that will be published towards the end of this year,”  said Abullah al Abri, head of Energy Renewal, a unit of the country’s leading oil & gas producer, Petroleum Development Oman said while speaking at a webinar hosted by the Ministry of Energy and the Italian embassy in Oman.

Germany utility giant Uniper has also joined hands with Oman for a major green hydrogen plan. According to the Oman Daily Observer, “Energy Renewal has been tasked with crafting the national hydrogen strategy.”

Given its coastal abundance, southern Oman has invested in a solid combination of strong winds and high solar irradiation to produce green hydrogen at cost-effective rates — allowing electrolysers (which split water molecules into H2 and oxygen) to work around the clock, powered by cheap renewable energy.

A 14GW facility powered by 25GW of wind and solar is currently being developed by InterContinental Energy, Omani oil & company OQ, and Kuwaiti state-owned tech company EnerTech.

Kuwait

Similar attempts to grow its renewable energy industry have been made by Kuwait which is seeking to explore hydrogen as one part of its energy transition projects. According to the White paper on Kuwait’s investments in green hydrogen, key technological opportunities for green hydrogen in Kuwait have been identified along with techno-economic assessments of producing it. The Oxford Institute for Energy studies reports, “Results of utilized hydrogen production model show that for production in 2032 average levelized cost of hydrogen (LCOH) is US$3.23/kg using PEM technology & US$4.41/kg using SOEC technology.  Results indicate that green hydrogen in Kuwait is more competitive than in other regions, but is currently not competitive (>US$1.5/kg) with oil, coal, and gas in the absence of carbon taxes.”

Partnerships, Productivity, and Provisions for finance and human capital could boost the Middle East’s 2050 net-zero future while enabling  Employment, Economy, and Education in the region.