Saudi Arabia to use $110 billion natural gas field for Blue Hydrogen

Saudi Arabia will use the $110 billion Jafurah development project for manufacturing Blue Hydrogen. Read all you need to know.

Created On: Oct 25, 2021 18:01 IST
Blue Hydrogen: Saudi state energy company Aramco; Source: Reuters
Blue Hydrogen: Saudi state energy company Aramco; Source: Reuters

Saudi Arabia on October 24, 2021, announced that it will use one of the world’s biggest natural-gas projects to produce Blue Hydrogen. A large portion of gas from the $110 billion Jafurah development will be used for manufacturing Blue Hydrogen, said Saudi Arabia’s Energy Minister Abdulaziz bin Salman during a climate conference in Riyadh. Saudi Arabia termed the production of hydrogen as a key focus of the oil-rich kingdom to transition into a green-energy nation.

Saudi Arabia to use $110 billion natural gas field for Blue Hydrogen - Significance

The announcement to use $110 billion natural gas field for Blue Hydrogen came in a day after the Saudi government announced its pledge to become carbon neutral by 2060 by incorporating carbon sequestration and hydrogen production.

The Jafurah development project also reflects Saudi’s strategy to move away from its earlier goal of becoming an exporter of liquefied natural gas, a fuel that is cleaner than oil and coal. Many governments have expressed to phase out liquified natural gas.

Large-scale Blue Hydrogen exports likely to begin after 2030: Saudi state energy company Aramco

The Saudi state energy company Aramco said that large-scale Blue Hydrogen exports will likely begin after 2030. Jafurah is estimated to hold 200 trillion cubic feet of gas and Aramco expects to begin production in 2024. Aramco is currently planning to open up the Jafurah field in the east of Saudi Arabia to foreign investors. It is working out details with an advisor as it deliberates on raising equity or debt for developing the vast field.

Saudi Arabia has also expressed its interest in exporting Green Hydrogen which is produced by a process using renewable energy such as wind or solar. The Green Hydrogen production process produces zero carbon emissions. As per Prince Abdulaziz, Saudi Arabia is capable of making the world’s cheapest Green Hydrogen.

Market for Hydrogen: Saudi Arabia aims to be biggest Hydrogen exporter

A market for hydrogen barely exists today but could be worth $700 billion annually by 2050 if producers can bring down costs, as per BloombergNEF. Energy Minister Prince Abdulaziz bin Salman al-Saud on October 24, 2021, said that Saudi Arabia aspires to be the biggest supplier of hydrogen. Currently, the world’s biggest oil exporter intends to produce and export about 4 million tons of hydrogen by 2030.

Saudi Arabia is also building a $5 billion plant in Neom that will be powered by solar and wind energy. It will be among the world’s biggest Green Hydrogen makers after its launch in 2025.

Also read: What is National Hydrogen Mission launched by PM Modi on 15th August 2021?

Types of Hydrogen

As per the World Energy Council (WEC), 96 per cent of hydrogen production is derived from fossil fuels through carbon-intensive processes. Hydrogen is classified into three forms: Green, Grey, and Blue.

Blue Hydrogen: This type of Hydrogen is produced by converting natural gas and capturing carbon dioxide emissions. The process releases CO2 emissions during the production of hydrogen however these are trapped through carbon capture.

Green Hydrogen: Green hydrogen is extracted through the electrolysis of clean energy sources such as renewables. Therefore, this process releases zero carbon (CO2) emissions but is expensive and commercially not viable yet.

Grey Hydrogen: It is extracted through the burning of fossil fuels. It is not an expensive type but releases a lot of CO2 emissions.

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