Low-Carbon Hydrogen Projects in the Middle East: What’s in store for 2022?

The last 12 months have seen a flurry of activity around green and blue hydrogen projects in the Middle East, with announcements of national strategies, new projects, new alliances, and investments.

Given the availability of low-cost renewable energy in the region, and the exciting potential of exporting decarbonized materials made with blue or green hydrogen, the race to produce low-carbon hydrogen at scale has begun.

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“We are still in the very early days of a clean hydrogen market: nearly the entire market is currently generated by fossil fuels, not renewables. But the many bricks laid in 2021 will undoubtedly help propel activities this year,” John Roper, CEO Middle East at Uniper Global Commodities wrote in a commentary for UAE daily The National.

“This year, the Middle East will look at every point on the compass to curate relationships with developers, offtakers and partners wherever they can. I also expect Middle Eastern stakeholders to look more closely at the transport of clean hydrogen this year,” he said.

And with both COP27 and COP28 set to take place in the region – Egypt in 2022 and the UAE in 2023 – this will only accelerate the region’s ongoing decarbonization drive.

Here’s a round-up of the region’s top low-carbon hydrogen projects planned for 2022.

United Arab Emirates: Launches Hydrogen Leadership Roadmap

The UAE launched its Hydrogen Leadership Roadmap in October 2021 as a blueprint to support domestic low-carbon industries and establish the country as a competitive exporter of hydrogen. There are at least seven low-carbon hydrogen projects underway that will target 25% share of sales in key export markets, including Japan, South Korea, Germany, and India, according to state news agency WAM.

ADNOC Blue Ammonia Production Facility

Abu Dhabi National Oil Company (ADNOC) is leading the development of a blue ammonia production facility with a capacity of 1 million tonnes per year (t/yr) at the new TA’ZIZ industrial ecosystem and chemicals hub in Ruwais.

The company is developing the project in partnership with Abu Dhabi’s state holding firm ADQ, Fertiglobe – a JV of ADNOC and Netherlands’ OCI – as well as Japan’s Mitsui & Co. and Korea’s GS Energy. A final investment decision for the project is expected in 2022 and start-up is targeted for 2025.

Blue ammonia is made from nitrogen and blue hydrogen derived from natural gas feedstocks, with the carbon dioxide by-product from hydrogen production captured and stored. CO2 from ADNOC’s ammonia production process will be captured and transferred to Al Reyadah CCUS facility, which has been operating since 2016 and which currently undergoing a major expansion.

ADNOC has already agreed to sell the blue ammonia to several Japanese companies, including Itochu, for use in fertilizer production, INPEX for use in power generation, and Idemitsu for use in their refining and petrochemicals operations.

TAQA-Abu Dhabi Ports Green Hydrogen-to-Ammonia Project

A $1 billion green hydrogen-to-ammonia export project is taking shape in Khalifa Industrial Zone. Led by Abu Dhabi National Energy Company (TAQA) and Abu Dhabi Ports, the industrial scale plant will be fueled by hydrogen produced by an electrolyzer facility, paired with a 2 GW solar photovoltaic power plant. It will start production in the Q2 2024.

Helios Industry, an Abu Dhabi-based special project vehicle company set up to develop, finance, construct, own and operate the project, plans to start producing 40,000 t/y of green ammonia in the first phase, raising the capacity to 200,000 t/yr in 2026, S&P Global Platts said in a report.

The project will also feature a storage facility at Khalifa Port, enabling it to become a hub for exporting green ammonia to international markets, mainly Europe and the US.

SAN Group Green Hydrogen Production Unit

In Ras Al Khaimah, the UAE’s the northernmost emirate, Austria-based biotechnology company SAN Group is investing $3.3 million to build an integrated sustainable hydrogen production unit, plant, and fish farm.

A newly established UAE-based subsidiary, SAN Enertech, will work on the project, which will include a research center, laboratory, desalination plant and a greenhouse, as well as hydroponic and aquaponic indoor systems. Solar energy will power all the buildings on the premises and will also be used to produce green hydrogen.

The green hydrogen will be used for “mobility and as electricity storage in the night hours”, according to SAN Group. The project is expected to be operational by the end of 2022.

Saudi Arabia: Green Hydrogen Focus

Like the UAE, Saudi Arabia is exploring ways to become a global supplier of hydrogen as it looks to diversify its economy and reduce dependence on oil. The country has set clean-hydrogen production targets of 2.9 million t/yr by 2030 and 4 million t/yr by 2035.

NEOM Green Hydrogen-Based Ammonia Production Project

A JV between US-based Air Products, Saudi developer ACWA Power, and the kingdom’s zero-carbon city NEOM, is currently developing a $5 billion project that will produce green ammonia for export to global markets. The JV, known as NEOM Green Hydrogen Company, recently hired financial firm Lazard to advise on the project.

Located in NEOM city on the Red Sea coast, the plant will produce 1.2 million tonnes per year of green ammonia plant, which will use hydrogen produced from an electrolyzer powered by more than 4 GW of renewable energy. If the plant meets its daily production target of 650 tonnes of green hydrogen when it comes onstream, it could potentially be the world’s largest.

The 2 GW electrolysis plant is being supplied by Germany’s thyssenkrupp Uhde Chlorine Engineers, while Air Products will be the offtaker for the produced green ammonia and will invest a further $2 billion in distribution.

Financial closing of the project is expected in the first half of 2022, after which construction would commence, Saudi Arabia’s English daily Arab News reported last October. Commercial operation is scheduled to begin in 2026.

OMAN Turns to Solar and Wind for Green Hydrogen

Oman, the Middle East’s biggest oil producer outside OPEC, is also investing in green hydrogen development as part of its efforts to decarbonize the energy sector. The country’s plan to build a hydrogen economy with a renewable energy capacity of 30 GW is expected to draw $34 billion in green project investments by 2040, Oman Daily Observer reported last November.

Green Energy Oman

Oman’s state-owned energy company OQ is playing a central role in the country’s hydrogen plans. It is leading a consortium comprising InterContinental Energy, a Hong Kong-based green hydrogen developer, and EnerTech, a Kuwait government-backed clean energy investor and developer, to build an integrated green-fuels mega project over an area of 6,500 square kilometers.

Powered by 25 GW of solar and wind generation capacity, Green Energy Oman will produce 1.8 million t/yr of green hydrogen and 10 million t/yr of green ammonia at full capacity. The hydrogen can be used locally, exported directly, or converted into green ammonia for international export. The feasibility study for the project will be completed by the end of 2022.

The large scale of the project is expected help optimize the capex cost, while any small fluctuations in electricity output, due to the project’s dependence on solar and wind resources, will have a lower impact on the overall system, Ahmed al Rawas, project manager at OQ’s Alternative Energy unit, said during the Green Hydrogen Summit Oman last November.

A final investment decision is expected in early 2026, which would pave the way for construction work to commence in 2027. The project will be built in three phases over 10 years, with expansions dictated by global demand for green energy. It will have an operational life of around 50 years.

OPAZ-ACME Green Hydrogen and Ammonia Project

In March 2021, Oman’s Public Authority for Special Economic Zones and Free Zones (OPAZ) and India's renewables company ACME Group agreed to set up a large-scale facility to produce green hydrogen and green ammonia in Duqm, a new city in the desert which the government is establishing major economic hub.

The $3.5 billion project will comprise an integrated facility using 3 GW of solar capacity and 0.5 GW of onshore wind energy to produce 2,400 tonnes per day of green ammonia (or 0.9 million tonnes per year). In October 2021, ACME selected Texas-based oil and gas engineer KBR to provide ammonia synthesis technology for facility.

The facility is planned to be operational in 2022 and will produce 300 tonnes per day of green ammonia in its initial phase.

by Heba Hashem, energy and climate journalist