Related Articles

• 
  Hydrogen’s future may not be so green

  29 May 2025

  Commentary
  Jennifer Aguinaldo
  Energy & technology editor

  Much has changed in the region’s hydrogen landscape since the first projects were launched in a flurry of excitement.

  Initially, in anticipation of demand for low-carbon fuel arising from Asia and Europe by the early 2030s, aspiring green hubs such as Egypt, Morocco, Abu Dhabi and Saudi Arabia announced batches of large-scale green hydrogen and ammonia projects.

  Two or three of these have progressed. At Neom, the world’s largest and most ambitious green hydrogen and ammonia production plant is under construction. The $8.4bn project reached financial close in May 2023, achieved a 60% completion rate in December, and appears on track to meet the company’s 2026 target commercial operation date.

  In Oman, meanwhile, where the sultanate’s third hydrogen block land auction is ongoing, developers and downstream companies are expected to submit bids sometime this year.

  However, across the Middle East and North Africa region, most of the projects announced in the past few years remain in the concept or preliminary design stages, while the rest have not moved beyond signing the memorandums of understanding.

  With the exception of Oman, there have been few announcements on new green hydrogen projects in the region over the past 12 months.

  Shareholders have even revolted over clean hydrogen plans. Seifi Ghasemi, former CEO of Air Products, which co-owns the Neom Green Hydrogen Company, along with Saudi utility developer Acwa Power and gigaproject developer Neom, was removed from the firm’s board earlier this year, with sources citing the company shareholders’ opposition to the firm’s green hydrogen plans.

  In addition to being a co-owner, Air Products is also the main offtaker, contractor and systems integrator of the Neom green hydrogen project.

  Cost issue

  The main issue for these projects remains the cost of production, according to Michael Liebreich, managing partner at UK firm EcoPragma Capita.

  “If green ammonia is going to work anywhere, it should be [in] Oman and the GCC,” he explains. However, the London-based executive and entrepreneur has doubts about green hydrogen’s economics.

  Earlier this year, his conversations with “a number of participants in green hydrogen and ammonia projects” indicate that the costs they are able to achieve today come to around $6 a kilogram (kg), and potentially $4/kg in five years for projects coming online in the early 2030s.

  “They talk about $3/kg or $2.5/kg, but you could only get there by offering incentives such as subsidies, concessionary finance, free land, free infrastructure and offtake guarantees,” notes Liebreich.

  While the region has very cheap solar power, a $15 a megawatt-hour (MWh) solar tariff does not necessarily lead to cheap hydrogen because it is only available roughly 25% of the time. To get to 24/7, one needs batteries, and in jurisdictions like Abu Dhabi, this will take the price to roughly $50/MWh.

  Adds Liebreich: “And since you need 50kWh of power per kilogram of hydrogen, assuming an 80% efficiency, that means you have $2.50/kg just of electricity cost. No capex, no maintenance, no compression, no pipelines, nothing. So $4/kg looks like being a floor price for a long time; $3/kg would be the outside edge of achievable.”

  Meanwhile, fossil gas at around $1-1.50/kg creates an extra cost of $2.50/kg, which means that anyone producing a million tonnes of green hydrogen a year has to cover the extra cost of $2.5bn a year and find at least 15 years of guaranteed offtake to get the project built.

  “You need to secure 15 years of support to close the cost gap of $37.5bn. You need it guaranteed upfront by someone with a bullet-proof balance sheet – so that’s either a government or sovereign wealth fund.”

  The near-impossibility of exporting liquid hydrogen to Europe due to prohibitive costs and inefficiency of liquefying the hydrogen should also be considered.

  In comparison, a more feasible option could be putting ammonia on a ship to Europe, where it could benefit from a Carbon Border Adjustment Mechanism (CBAM) at the same price as a tonne of carbon under EU-ETS.

  According to Liebreich, under this scenario, each kilogram of green hydrogen reduces emissions by around 9kg, and the EU-ETS price today is €72 ($81)/tonne.

  “So each kilogram of green hydrogen will avoid a carbon price of $0.009 x 81, which is equal to $0.72. That closes your gap, so a tonne of green ammonia is now only $320 more than a tonne of grey, or only double the price,” Liebreich explains.

  “Look at it another way, if you want to export 1 million tonnes of hydrogen as ammonia a year into Europe, you are still looking at an annual cost gap of $1.8bn after taking the EU-ETS CBAM into account. And you need a 15-year deal, so that’s $27bn,” he notes, under the assumption one can get the hydrogen price down to $4/kg.

  Far from being rosy, Liebreich concludes that green hydrogen-wise, the region could be heading down a blind alley. “There will be almost no import market for green hydrogen or its derivatives because, in the best scenario, they will remain too expensive.”

  Bright side

  Liebreich’s dour forecast collides with the vision of most regional stakeholders that net zero by 2050 will not be possible without low-carbon, and particularly green, hydrogen and its derivatives, including green ammonia, methanol and sustainable aviation fuel.

  Mohammad Abdelqader El-Ramahi, chief green hydrogen officer at Abu Dhabi Future Energy Company (Masdar), for instance, told MEED in October that green hydrogen is the most important driver and enabler of net zero and decarbonisation. “Very few people know that electrification alone can address no more than 30% of our decarbonisation [needs], even if we install all sorts of renewable sources,” he said.

  Abu Dhabi intends to replicate its success in the energy sector’s previous four waves – oil and gas in the 1960s, liquefied natural gas and anti-flaring in the 1970s, renewable energy in the 2000s and nuclear energy in the 2020s – in the sector’s fifth low-carbon hydrogen wave.   

  The list of Masdar’s potential green hydrogen partners includes Ireland-headquartered Linde; France’s TotalEnergies; the UK’s BP; Austria’s Verbund; and Japan’s Mitsui, Osaka Gas, Mitsubishi Chemical, Inpex and Toyo Gas.

  Despite the slow progress and major reality check, hope proverbially springs. “Green hydrogen is the inevitable future fuel,” El-Ramahi asserted.

  

   

  https://image.digitalinsightresearch.in/uploads/NewsArticle/13956351/main.gif

  Jennifer Aguinaldo
• 
  Tabreed team holds Pal Cooling acquisition talks

  29 May 2025

  

   

  A team comprising Engie-backed National Central Cooling Company (Tabreed) and Luxembourg-headquartered CVC is understood to be holding exclusive discussions to acquire Pal Cooling Holding (PCH), the district cooling unit of Abu Dhabi’s Multiply Group.

  According to an industry source, the team submitted a bid of $1.1bn for PCH.

  Other investment groups eyeing the deal include US-based investment firms KKR and I Squared Capital and Bahrain-based Investcorp.

  It is unclear if one-on-one discussions are under way separately with the other bidders.

  MEED contacted CVC, Multiply and Tabreed for comments.

  District cooling plants and networks deliver chilled water to cool residential and industrial buildings, offering a more economical and sustainable alternative to conventional air-conditioning systems.    

  Abu Dhabi’s IHC, the chairman of which is the UAE national security adviser and Abu Dhabi deputy ruler, Sheikh Tahnoon Bin Zayed Al-Nahyan, controls Multiply Group.

  PCH has six district cooling plants with a total installed capacity of 139,800 refrigeration tonnes.

  https://image.digitalinsightresearch.in/uploads/NewsArticle/13972845/main.jpg

  Jennifer Aguinaldo
• 
  Iraq maintains its pace, for now

  29 May 2025

  Commentary
  John Bambridge
  Analysis editor

  Iraq faces economic challenges amid lower oil prices and global shocks that raise concerns over Baghdad’s ability to maintain its heightened spending trajectory – even as that spending is supporting project and non-oil growth.

  With a Brent crude oil price around the $64-a-barrel mark, and with a budget breakeven price point closer to $110 under the government’s expansionary 2023–25 budget, Iraq is on course to rack up a deep deficit in the near term. Yet given Baghdad’s junk-rated credit, any fiscal course that risks drawing the government closer to external financing is perilous.

  At the same time, Iraq has infrastructure ambitions that will only be realised if the country maintains its near-term capital investments, so for now that remains the course. Indeed, the heightened spending – alongside external investment – is creating significant buoyancy in the projects sector.

  Iraq’s oil, gas and chemicals project market in particular has surged to its highest value in a decade, reaching $152.2bn as of May 2025, while the value of projects under execution in the sector has risen to a record $93.3bn.  

  The resilience of Iraq’s energy sector comes despite political and security challenges. Even as firms like Shell and ExxonMobil have exited the market, citing operational difficulties, the UK’s BP has invested heavily in reviving Kirkuk’s oil fields, and France’s TotalEnergies is working to develop and upgrade the southern Ratawi field through its Gas Growth Integrated Project. 

  In the power sector, several of the country’s biggest projects have advanced to the execution stage in recent months, with Iraq signing preliminary deals to build and upgrade up to 38GW of gas power capacity in the country.

  Chinese firms have meanwhile signed engineering, procurement and construction contracts for more than $20bn of energy and power schemes since the start of 2024.

  In the broader general contracting sector, there are $78bn-worth of planned projects, including $54bn in the construction sector and $24bn in the transport sector. This project activity is being supported by significant budget commitments – $42bn in 2024 – into infrastructure and housing.

  The strength of the project activity in the market is such that it helps mask the fiscal trouble stalking the government. Soon, however, Baghdad will either need to check its outlays or court disaster. Structural reforms – either to tackle runaway running costs on wages and pensions or to generate fresh tax revenue – present unpalatable options for the fragile coalition government.

  Baghdad will be hoping the oil price improves, and that the energy, power and logistics infrastructure being developed will provide enough of a productivity boost to set the whole country on a more positive growth footing.

  

   

  ---

  MEED’s June 2025 report on Iraq includes:

  > GOVERNMENT & ECONOMY: Iraq’s economy faces brewing storm
  > OIL & GAS: Iraqi energy project value hits decade-high level
  > PIPELINES: Revival of Syrian oil export route could benefit Iraq
  > POWER: Iraq power sector turns a page
  > CONSTRUCTION: Iraq pours billions into housing and infrastructure projects
  > DATABANK: Iraq forecast dips on lower oil prices

  https://image.digitalinsightresearch.in/uploads/NewsArticle/13956725/main.gif

  John Bambridge
• 
  Iraq forecast dips on lower oil prices

  29 May 2025

  Download the PDF

  

  ---

  MEED’s June 2025 report on Iraq includes:

  > COMMENT: Iraq maintains its pace, for now
  > GOVERNMENT & ECONOMY: Iraq’s economy faces brewing storm
  > OIL & GAS: Iraqi energy project value hits decade-high level
  > PIPELINES: Revival of Syrian oil export route could benefit Iraq
  > POWER: Iraq power sector turns a page
  > CONSTRUCTION: Iraq pours billions into housing and infrastructure projects

  To see previous issues of MEED Business Review, please click here

  https://image.digitalinsightresearch.in/uploads/NewsArticle/13974135/main.gif

  MEED Editorial
• 
  May 2025: Data drives regional projects

  29 May 2025

  Click here to download the PDF

  Includes: Commodity tracker | Construction risk | Brent Spot Price | Construction output

  ---

  MEED’s June 2025 report on Iraq includes:

  > COMMENT: Iraq maintains its pace, for now
  > GOVERNMENT & ECONOMY: Iraq’s economy faces brewing storm
  > OIL & GAS: Iraqi energy project value hits decade-high level
  > PIPELINES: Revival of Syrian oil export route could benefit Iraq
  > POWER: Iraq power sector turns a page
  > CONSTRUCTION: Iraq pours billions into housing and infrastructure projects

  To see previous issues of MEED Business Review, please click here

  https://image.digitalinsightresearch.in/uploads/NewsArticle/13974082/main.gif

  MEED Editorial