meed-logo

line1 line2 line3
SIGN IN / REGISTER

Region primed for global green hydrogen leadership

15 August 2022

Published in partnership with

There have been fewer hot topics in the Middle East and Africa (MEA) over the past 18 months than the development of green hydrogen production.

Ever since Neom, Acwa Power and Air Products announced their $5bn investment in a world-scale green hydrogen production complex as the anchor project of the $500bn Neom development in 2020, energy companies around the world have been racing to establish plans of their own in the region.

Today, there are at least 46 known green hydrogen and ammonia projects across the MEA region, with an estimated total budget of more than $92bn.

Almost all have been announced since the start of 2021, equivalent to nearly two new projects a month. 

Competitive advantage

This sudden surge of interest in hydrogen needs little explanation. Due to its climate, the region enjoys the world’s highest solar irradiation levels, enabling the production of some of the cheapest renewable energy anywhere.

The 600MW Al-Faisaliah independent solar photovoltaic (PV) power project in Saudi Arabia, for instance, currently holds the world record for the lowest renewable energy levelised cost of electricity of just $1.04 cents a kilowatt hour. 

This electricity from renewable sources is used to electrolyse vast amounts of treated and filtered seawater to extract hydrogen, which in turn is processed with air-derived nitrogen to produce the more easily transportable ammonia.

The ammonia can then be liquefied, compressed and exported by ship to the end-user market, where it can be converted back to hydrogen to be used as a clean fuel or utilised as ammonia for fertiliser or other industrial processes.

Other alternatives include converting the hydrogen to methanol, another more easily transportable fuel product, or piping the hydrogen directly to the end user, either for domestic purposes or for export. 

Along with plentiful sunlight, the other main requirement to house the huge solar and wind farms is space, something the region is generally not short of. Oil and gas-importing nations such as Morocco, Ethiopia and South Africa can also benefit from the hydrogen project boom. 

First mover status

Aside from the environmental benefits of green hydrogen as a carbon-free fuel, it also offers the oil-exporting states of the Middle East the tantalising prospect of diversifying their dominant crude production position with hydrogen, thereby safeguarding their economies for decades to come as well as enhancing their geopolitical significance.

Speed of capital investment to drive technological leadership and potentially first-mover advantage is arguably going to be another important factor.

From a demand perspective, there is no doubt about green hydrogen’s potential. Demand in Europe alone is forecast to double to 30 million tonnes a year (t/y) by 2030 and to 95 million t/y by 2050.

Thanks to its geographical position, the Middle East is ideally located to meet this demand either by ship or pipeline. 

Until recently, green hydrogen may not have been considered financially viable. Today, it could be described as an economic necessity

MEA Energy Week insights

The massive potential and development of a green hydrogen production industry was one of five central themes and insights emerging from the Middle East & Africa Energy Week hosted by Siemens Energy in June. 

Yet a live poll of up to 400 delegates as part of Siemens Energy’s Middle East & Africa Energy Transition Readiness Index, produced in partnership with Roland Berger, highlighted that a substantial majority felt that Power-to-X technology – of which hydrogen production is a major component – was slow in meeting its potential. 

To put this into perspective, with the notable exception of the Neom-based Helios project and the pilot green ammonia scheme at Ain Sokhna in Egypt, none of the other 44 announced green hydrogen projects in the region have yet to start work on the ground. Many have not even reached a full investor agreement. 

The principal challenges revolve around financing, supply and power purchase agreements, land allocations and permitting. Ultimately, even with cheap electricity, green hydrogen is still comparatively expensive to produce after factoring in electrolysis, processing and transportation costs.

There is also some debate over whether the end-user market is ready to pay a premium for cleaner fuel or chemical feedstock.

A related poll question among the Energy Week’s attendees underlined this. Of 11 energy priorities presented, Power-to-X solutions were ranked as the lowest priority in terms of the impact on their companies’ achievement of climate targets.

However, this could change rapidly. The Russia-Ukraine crisis has focused European capitals on the pressing need to diversify fuel sources. Until recently, green hydrogen may not have been considered financially viable. Today, it could be described as an economic necessity. 

Transitioning to hydrogen requires huge investment to develop technology, build projects and establish marketplaces that collectively contribute to a cleaner energy future. This coordinated effort by all stakeholders must be supported by policymakers

Nabil al-Nuaim, Saudi Aramco 

Encouraging local demand

Equally important is the development of local hydrogen demand. To date, few formal policies or strategies have been announced to stimulate a market for domestic demand, reflected by the fact that almost all of the planned green hydrogen projects pipeline are export orientated.

While this export focus may make sense commercially, there was unanimity among the event’s participants that more could be done to encourage home-grown demand. 

“Transitioning to hydrogen requires huge investment to develop technology, build projects and establish marketplaces that collectively contribute to a cleaner energy future,” said Saudi Aramco’s chief digital officer, Nabil al-Nuaim. “This coordinated effort by all stakeholders must be supported by policymakers to achieve success.”

This view was echoed by Khaled Sharbatly, CEO of solar PV panel manufacturer and power developer Desert Technologies. “We need to accelerate the growth of energy in Africa, accelerate energy storage and innovation, and build a regulatory framework where everyone is in sync,” he said.

The development of regulations and policy reforms to provide impetus will be vital for the market to grow, as will associated strategies such as introducing carbon pricing, reducing electricity subsidies, unbundling power networks and incentivising electric vehicle usage. 

If it fails to do so, the region may miss the opportunity to capitalise on hydrogen’s potential to create jobs and a local manufacturing industry, diversify economies, and, most importantly, reduce carbon emissions and achieve net zero.

Click here to visit Siemens Energy 
 
https://image.digitalinsightresearch.in/uploads/NewsArticle/9927113/main.gif
MEED Editorial

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Iraq to start procurement for $1bn rail modernisation

    2 July 2025

     

    Iraq’s Ministry of Transport and its General Company for Railways division will soon start procurement for a $1bn-plus modernisation programme of its north-south main rail line.

    Known as the Iraq Railways Extension & Modernisation (IREM) project, the scheme comprises the rehabilitation, upgrade and modernisation of 1,047 kilometres (km) of existing single-line track linking Umm Qasr Port in the south with Mosul in the north, running through Basra and Baghdad.

    There will be two main construction packages. The first contract, expected to be tendered in October, covers:

    • Renewal of 32km of track between Al-Yussifia and Baghdad, totalling 32km, with an estimated cost of $33m
    • Renewal of 20km of track between Baghdad and Taji, totalling 20km, with an estimated cost of $21m
    • Renewal of the line between Baiji and Mosul, totalling 189km, with an estimated cost of $197m

    The second deal involves the largest element of the programme: an estimated $570m deal to install European Train Control System (ETCS) signalling and ducts for optical fibre along the entirety of the line, including a safety level-crossing protection system for all official crossings along the alignment, and the modernisation of selected train stations.

    The package will also include the:

    • Spot rehabilitation of the 72km-long Umm Qasr-Basr line, with an estimated cost of $4m
    • Spot rehabilitation of the 520km-long section between Basra and Baghdad, with an estimated cost of $32m

    Requests for proposals for this second deal are due to be issued in January 2026.

    Before then, the client is expected to tender an estimated $15m contract for the capex management role on the scheme this month.

    Iraq’s rail sector consists of a 2,272km standard gauge network with 115 stations, most of which are in poor condition and provide only limited transport options.

    The system features two main routes: the north-south line and an east-west line running from Baghdad to near the Syrian border.

    There are also several short branch lines. Service is limited, with a few freight trains carrying oil and grain, as well as passenger services, including an overnight Baghdad–Basra train and a weekly train to Samarra.

    The southern section of the north-south line was partly restored in 2014, allowing trains to run up to 80km an hour (km/h) with a 25-tonne axle load.

    The northern segment, from Baghdad to Rabiaa and linking to Syria, operates at 40-60 km/h with an axle load limit of 18-20 tonnes. This section sees limited and irregular freight movement and contains a major workshop at Baiji that will be refurbished under the programme at an estimated cost of $10m.

    The modernised railway line is expected to carry 6.3 million tonnes of domestic freight, 1.1 million tonnes of exports and imports, and 2.85 million passengers by 2037.

    The IREM project is a central component of Iraq’s Development Road (IDR) Initiative, which aims to position Iraq as a regional transportation hub linking the GCC states with Turkey and then Europe. In the long run, the network is hoped to connect with the planned GCC railway in Kuwait.

    The launch of the project follows confirmation from the World Bank of a loan agreement worth $930m to fund almost all of the project. 

    Prior to the extension of the loan, Italy’s BTP Infrastrutture carried out the initial feasibility study and preliminary design work.

    The firm is also conducting a similar contract covering a new multibillion-dollar 1,700km high-speed railway between Al-Faw on the Gulf coast and Fishkabour on the Syrian border, along with a major highway along the same alignment.

    It has also been engaged on the design of the Al-Faw Grand Port project. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14187478/main.gif
    Edward James
  • Hong Kong firm reveals $3bn Riyadh tech district design

    2 July 2025

    Register for MEED’s 14-day trial access 

    Hong Kong-headquartered architectural firm LWK & Partners has released details about the estimated SR12bn ($3.2bn) Pulse Wadi project, an upcoming technology and cybersecurity district located on the outskirts of Riyadh.

    The project will span an area of over 600,000 square metres (sq m) with a gross floor area of about 1.14 million sq m.

    In an official statement, the firm said that the project will be anchored by a government complex, two iconic headquarters, several cultural institutions and a dynamic cyber-research district.

    At the centre of the district lies the central wadi plaza, which will be an events space.

    LWK & Partners is the project’s lead design consultant, master planner, urban designer, design architect and landscape architect.

    According to UK data analytics firm GlobalData, the construction industry in Saudi Arabia is expected to grow by 4.4% in real terms in 2025, supported by investments in the housing, energy, industrial and transport infrastructure sectors, coupled with investments in preparation for football’s Fifa World Cup 2034.

    In November last year, the government approved the kingdom’s 2025 budget, which includes a total expenditure of SR1.3tn ($342.7bn) for this year.

    The commercial construction sector is expected to grow by 3.7% in real terms in 2025, before registering an annual average growth rate of 3.7% in 2026-29, supported by investments in leisure and hospitality, retail, data centres and sports infrastructure projects. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14187435/main.jpg
    Yasir Iqbal
  • Indian contractor wins Ruwais LNG jetty construction

    2 July 2025

    Register for MEED’s 14-day trial access 

    India-based ITD Cementation India has announced winning a contract worth $67.7m for jetty construction work on Abu Dhabi National Oil Company’s (Adnoc) upcoming liquefied natural gas (LNG) processing terminal at Ruwais in Abu Dhabi.

    The job is understood to have been awarded by a consortium of France’s Technip Energies, Japan-based JGC Corporation and Abu Dhabi-owned NMDC Energy, the main contractors performing engineering, procurement and construction (EPC) works on the $5.5bn project.

    Prior to awarding this sub-contract to ITD Cementation India, the consortium of Technip Energies, JGC Corporation and NMDC Energy awarded Abu Dhabi-based Dutch Foundations a contract to perform piling works on the Ruwais LNG project.

    Also, in January, US-based midstream energy and storage services provider Chicago Bridge & Iron (CB&I) won an order from the main EPC consortium to supply two cryogenic tanks for the Ruwais LNG project. CB&I described the contract as “substantial”, a term it uses to denote values between $250m and $500m.

    Ruwais LNG terminal project

    The upcoming LNG export terminal in Ruwais will have the capacity to produce about 9.6 million tonnes a year (t/y) of LNG from two processing trains, each with a capacity of 4.8 million t/y. When the project is commissioned, Adnoc’s LNG production capacity will more than double to about 15 million t/y.

    Adnoc awarded the full EPC contract to the consortium of Technip Energies, JGC Corporation and NMDC Energy, and achieved the final investment decision for the Ruwais LNG terminal complex in June last year.

    The complex will also feature process units, storage tanks and an export jetty for loading cargoes and LNG bunkering, as well as utilities, flare handling systems and associated buildings.

    The planned LNG facility will run on electric-powered rotary equipment and compressors instead of gas-fired units. Adnoc awarded a $400m contract in October 2023 to US-based Baker Hughes for the supply of all-electric compression systems for the project. The LNG trains will run on energy-efficient Baker Hughes technology, including compressors driven by 75MW electric motors.

    Separately, Adnoc has also signed agreements with international energy companies to divest a total stake of 40% in the Ruwais LNG project.

    UK energy producer BP, Japan's Mitsui & Co, London-headquartered Shell and French energy producer TotalEnergies will each hold 10% stakes in the Ruwais LNG terminal project, with Adnoc retaining the majority 60% stake in the facility.

    Adnoc Group subsidiary Adnoc Gas will acquire its parent company’s 60% stake in the Ruwais LNG facility at cost in the second half of 2028, when first production from the complex is due.

    ALSO READ: Adnoc to supply LNG to Mitsui from Ruwais project

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14186135/main.jpg
    Indrajit Sen
  • Firm wins $27m Dubai Ras Al-Khor wildlife sanctuary work

    2 July 2025

     

    Austrian firm Waagner Biro, part of French engineering group Egis, has won a AED100m ($27m) contract for the first phase of the Ras Al-Khor wildlife sanctuary development project in Dubai.

    Dubai Municipality awarded the contract.

    The project’s first phase covers an area of over 6.4 square kilometres (sq km) and is expected to be completed by 2026.

    The scope involves rehabilitating mangrove habitats and increasing mangrove coverage from 40 hectares to 65 hectares. This includes adding new irrigation channels, rehabilitating mangrove forests, creating new habitats such as the mangrove lake, north edge lake and reed ponds, and adding a green spine.

    According to an official statement, the first phase also involves increasing the water bodies by 144%, expanding their total area to 74 hectares. Additionally, 10 hectares of mudflats will be added.

    Ras Al-Khor Wildlife Sanctuary was established in 1985 and is on the list of wetlands of international importance under the Ramsar Convention 2007, making it the first Ramsar site in the UAE. Birdlife International has also declared it an important bird area.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14185288/main.jpeg
    Yasir Iqbal
  • Kuwait extends deadline for Jurassic oil project

    2 July 2025

    State-owned upstream operator Kuwait Oil Company (KOC) has extended the bid deadline for its planned project to develop Jurassic Light Oil (JLO) export facilities and upgrade the existing export network.

    The main contract bid submission date for the project, which is understood to have a budget of KD175m ($569m), has been changed to 15 July 2025.

    The previous bid deadline was 24 June 2025.

    The project was originally tendered in November last year with a bid deadline of 1 December 2024.

    Other recent deadlines have included 27 May, 27 April and 6 April.

    In an announcement in April this year, the list of prequalified bidders was made up of 15 companies:

    • CTCI (Taiwan)
    • Daewoo (South Korea)
    • Fluor (US)
    • Hyundai Engineering & Construction (South Korea)
    • Hyundai Engineering Company (South Korea)
    • Hyundai Heavy Industries (South Korea)
    • JGC Corporation (Japan)
    • Larsen & Toubro (India)
    • NMDC Energy (UAE)
    • Petrofac (UK)
    • Saipem (Italy)
    • Samsung Engineering Company (South Korea)
    • Sinopec Engineering Corporation (China)
    • Sinopec Luoyang Engineering Company (China)
    • Tecnicas Reunidas (Spain)

    In September 2024, KOC made a second announcement about the project, stating that just 13 companies were prequalified.

    Both Hyundai Heavy Industries and NMDC Energy had been removed from the list.

    At the time, KOC said that companies not included on the list could file a complaint against their non-inclusion before the official invitation to bid on the project.

    It is unclear whether more prequalified companies have been added or removed from the list since September.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14179469/main1321.jpg
    Wil Crisp