Saudi Arabia to use $110bn gas project for blue hydrogen

Saudi Arabia said a key focus of one of the world’s biggest natural-gas projects would be on manufacturing blue hydrogen, as the kingdom steps up efforts to export a fuel seen as crucial to the green-energy transition.

A large portion of gas from the $110bn Jafurah development will be used for blue hydrogen, according to Energy Minister Abdulaziz bin Salman. The fuel is made by converting natural gas and capturing the carbon dioxide emissions.

“We are the biggest adventurers when it comes to blue hydrogen,” Prince Abdulaziz said at a climate conference in Riyadh on Sunday. “We’re putting our money where our mouth is on hydrogen. We have a terrific gas base in Jafurah we will use it to generate blue hydrogen.”

The comments underscore how the kingdom is moving away from previous plans to become an exporter of liquefied natural gas, a fuel that’s cleaner than oil and coal but which some governments have said they want to phase out.

A market for hydrogen barely exists today, but could be worth $700bn annually by 2050 if producers can bring down costs, according to BloombergNEF.

Saudi state energy company Aramco is considering opening up the Jafurah field in the east of the country to foreign investors, Bloomberg reported last month. Aramco is working with an adviser as it mulls raising equity or debt for the vast site, according to people familiar with the matter.

Jafurah is estimated to hold 200 trillion cubic feet of gas, and Aramco expects to begin production in 2024.

The kingdom also has plans to export green hydrogen, which is produced using renewable energy – usually solar and wind power – in a process that produces no carbon emissions.

Saudi Arabia can make the world’s cheapest green hydrogen, Prince Abdulaziz said.