Page 4 - DMEA Week 25 2022

DMEA COMMENTARY DMEA

ADNOC, Aramco up the ante

on hydrogen fuel carriers

Gulf NOCs are staking their claims for a leading position in the growing hydrogen
market, with ADNOC and Aramco considering various routes to market.

MIDDLE EAST AS momentum continues to build around the two countries, leveraging MCH as a carrier.
expansion of the nascent hydrogen sector, the While Japan has already committed to
key issue facing its growth is the functionality of acquiring, and receiving, hydrogen from the
WHAT: the supply chain – specifically how to transport UAE, the new project seeks to establish a deeper
ADNOC has signed the element safely, cheaply and globally. While connection. They will work to verify technical
up to a project that the conflict in Ukraine has had a significant and engineering elements of a 50,000 tpy hydro-
could develop a supply impact on short and medium-term dynamics in gen production and carry out a feasibility study
chain with Japan using oil and gas markets, mid-century net zero tar- for the potential expansion of the plant to reach
methylcyclohexane as the gets and concerns about the sustainability of the commercial production of 200,000 tpy. These
hydrogen carrier, while use of batteries in the transportation sector will processes will take around 12 months, following
Aramco is investing in the necessitate major investment. which the parties will also consider timelines for
potential of ammonia as a Keen to maintain their position of strength the commencement of 200,000 tpy of supplies
transportation fuel. in this new area, Middle East state oil firms have from the UAE.
been at the forefront of efforts to come up with The announcement comes as the UAE seeks
WHY: a solution to the supply chain dilemma that will to control around a quarter of the global low-car-
Both companies have allow them to continue to leverage world-class bon hydrogen market by 2030 and its sights are
strong positions in hydrocarbon reserves while remaining relevant firmly set on Asian consumers.
traditional energy to consumer nations that are looking to address Japanese firms Idemitsu, Inpex and Itochu
markets and are looking long-term environmental concerns. last year received blue ammonia cargoes while
to leverage their contacts Against this backdrop, Abu Dhabi National Mitsui and South Korean firm GS Energy
and holds over the value Oil Co. (ADNOC) and Saudi Aramco have been invested in a 1mn tpy blue hydrogen pro-
chain to expand into investigating routes to market – predominantly ject in the TA’ZIZ chemicals complex, part of
cleaner fuels. in Asia – through memoranda of understanding ADNOC’s Ruwais Derivatives Park.
(MoUs), studies and pilot projects. However, as in oil, the Emirati firm will face
WHAT NEXT: Earlier this month, ADNOC signed up to stiff competition for these markets from its
Aramco does not envisage a joint study with two Japanese firms for the southern neighbour, with Saudi Aramco already
a clear supply chain export of hydrogen in the form of methylcy- active in the same space and seeking to establish
being established before clohexane (MCH), while a start-up part-funded the same “pre-eminent” position it holds in
2030, but to achieve this by Saudi Aramco this week raised funding for crude supply. To achieve this, the company has
major investment will be the commercialisation of ammonia-to-power been investing throughout the value chain.
needed in the intervening technology.
period. Ammonia for transport
ADNOC ambition Amogy, which has received backing from Saudi
The scope of ADNOC’s project with Japan’s Mit- Aramco Energy Ventures (SAEV), South Korea’s
sui and its biggest refiner ENEOS covers studies SK Innovation, Amazon’s Climate Pledge Fund,
for the development of a 200,000 tonne per year AP Ventures and Newlab, closed a bridge fund-
(tpy) blue hydrogen supply chain connecting the ing round in which it received $46mn, taking its

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