Page 9 - MEOG Week 09 2021

MEOG PIPELINES & TRANSPORT MEOG

including Al-Ahli NCB, Al Rajhi, Riyad and be financed through a syndicated loan and/or a
Samba. bond issuance linked to revenue from the assets.
MEOG learned in Q4 that talks cooled when Meanwhile, sources have been quoted by
appetite for an agreement under previously dis- Reuters and Bloomberg as saying that Aramco
cussed terms diminished amid concern from the is set to take out a loan of $7.5bn which will be
conservative Energy Minister Prince Abdulaziz offered to potential investors in its pipeline arm
bin Saud, with further due diligence deemed as it seeks to ensure it can pay its Q4 2020 divi-
necessary. dend of $18.75bn, with the company having to
While JP Morgan and Japan’s MUFG were dip into its coffers for the previous two months
hired to advise on the deal, Aramco more to cover its shareholder obligations.
recently brought in Moelis & Co. for the same In mid-2019, BlackRock and KKR leased a
role and the transaction now appears to be near- 40% stake in ADNOC Oil Pipelines $4.9bn, with
ing closure. ADNOC leasing out a 49% in the ADNOC Gas
A company source told MEOGthat given Pipelines to a consortium backed by GIP and
the size of the transaction, the deal was likely to Brookfield in June last year for $10.1bn.™

Saudi offers to pipe hydrogen to

Europe in effort to claim market share

SAUDI ARABIA SAUDI Arabia’s Energy Minister this week said hydrogen most notably through the signing
that the Kingdom would be willing to provide of a $5bn deal with US-based Air Products to
‘green’ hydrogen to Europe by pipeline as Riyadh develop the world’s largest hydrogen production
stakes a claim to play a major role in the nascent facility at the $500bn Red Sea coast smart city,
sector. NEOM, integrated with a 4-GW solar, wind and
Speaking during a virtual meeting between storage project.
the International Energy Forum and the Euro- For its part, Abu Dhabi in January prepared
pean Union (EU), Prince Abdulaziz bin Salman for the launch of the Abu Dhabi Hydrogen Alli-
said: “If Europe would like to buy more hydro- ance (ADHA), with a memorandum of under-
gen, Saudi green hydrogen, we would be more standing (MoU) signed between ADNOC,
than happy, and even, if the economics allow Mubadala Investment Co. and holding com-
for it, even piping it all the way to somewhere pany ADQ. This followed an agreement between
in Europe.” ADNOC and Japan’s Ministry of Economy,
The comments come as Saudi and neighbour Trade and Industry (METI) to collaborate on
the UAE, predominantly led by state oil firms initiatives in fuel ammonia and carbon recycling.
Saudi Aramco and Abu Dhabi National Oil Co. At present, the state oil firm produces around
(ADNOC), are increasingly looking to establish 300,000 tonnes per year of hydrogen and has
themselves as leaders in ‘green’ and ‘blue’ hydro- plans to expand its total hydrogen capacity to
gen market, utilising their large hydrocarbons more than 500,000 tpy.
operations and world-scale solar projects to
generate the fuel. Dazzled by the sun
Last week, Aramco’s chief technical officer Meanwhile, Prince Abdulaziz added that solar
Ahmad al-Khowaiter said: “We think Japan and announcements by Riyadh would be forthcom-
South Korea will be where the first hydrogen ing, noting “I believe in the next month or so
trading markets will begin in the end of 2020s, we’ll dazzle the world with how cheaply we can
early 2030s,” adding that Aramco continues get our solar electricity”.
to analyse potential demand and pricing for The Gulf is already home to the world’s
hydrogen. cheapest solar power projects. At launch in late
The company has already carried out a suc- 2019, the Kingdom’s 300-MW Sakaka project
cessful pilot project with the Japan’s Institute of had the cheapest unit price of just $0.0234/kWh.
Energy Economics (IEEJ) gasifying oil residues There has since been more aggressive pric-
from refineries to generate 40 tonnes of blue ing for solar, with EDF and JinkoPower last year
ammonia for shipment to Japan and capturing submitting a price of $0.0135/kWh for a 1.5GW
50 tonnes of carbon dioxide (CO2) to be used solar project in Abu Dhabi.
in methanol production at and in enhanced oil The scale offered by Saudi projects like the
recovery (EOR) at the company’s ‘Uthmaniyah NEOM-related project could mean that the
field. Kingdom may pull out a trump card in the com-
Meanwhile, Saudi is making strides in green ing months.™

Week 09 03•March•2021 www. NEWSBASE .com P9