Region’s $155bn hydrogen projects require focus
17 November 2022
Commentary
Jennifer Aguinaldo
Energy & technology editor
As of 16 November, close to 50 green hydrogen projects requiring an estimated investment of at least $155bn are being planned in the Middle East and North Africa (Mena) region.
Integrated green hydrogen-based ammonia production facilities comprise the majority of these projects, which means the total estimated investments may be broken down into renewable energy plants, $102bn; electrolyser plants, $23bn; air separation units, $14bn; and civil works, $16bn.
The estimated investment excludes the infrastructure required to store or transport the end products to their destination.
These projects offer major opportunities for the entire value chain, not least for solar and wind power plants, which could account for an average two-thirds of the total investment.
The ongoing Cop27 UN climate summit in Egypt is helping build the momentum. Preliminary agreements for over 23GW of wind projects and several green hydrogen deals in Egypt have been signed immediately before and during the conference.
The North African nation already accounts for about 42 per cent of the planned green hydrogen and ammonia projects in the Mena region.
While there is widespread pessimism about the feasibility of most of these projects – with only one project having secured financing so far – the gravity of the Paris Agreement commitments and the stature of companies involved in these so-called early-mover projects are hard to dismiss.
Potential investors range from the region’s sovereign wealth funds, which built their portfolio using oil and gas revenues, to energy trading companies and suppliers, equity investors, port operators and international and regional utility developers.
Export credit agencies, particularly from the net-zero economies in Asia and Europe, are expected to play a crucial role as they consider underwriting the substantial risks, and potential returns, that these projects carry at this early stage.
Scaling electrolyser capacity and production in time to meet the proposed projects’ timelines is a key question yet to be answered. Producing and consuming countries also need to set up mutually agreed standards and regulations on what constitutes clean and green hydrogen.
These and other issues will influence how these projects can reach a final investment decision (FID). Offtake and financing negotiations have been dragging on for nearly two years for some of the earliest schemes, which holds back the projects from reaching the construction phase.
The understanding is that potential stakeholders for most of the projects are nowhere near reaching FID and, except for a very small number of exceptions, may need a few more years to get there.
Similarly, the inertia to ramp up fossil fuel capacities in the wake of the energy crunch induced by the Russia-Ukraine war is not necessarily helping these projects get over the line sooner, or as expected.
Exclusive from Meed
-
-
Egypt makes steady progress on Assiut refinery
2 June 2023
-
Mawani implements $950m of Saudi port projects
2 June 2023
-
Dubai unveils new masterplan for Palm Jebel Ali
1 June 2023
-
Swedish firm to deliver apartments for Neom
1 June 2023
All of this is only 1% of what MEED.com has to offer
Subscribe now and unlock all the 153,671 articles on MEED.com
- All the latest news, data, and market intelligence across MENA at your fingerprints
- First-hand updates and inside information on projects, clients and competitors that matter to you
- 20 years' archive of information, data, and news for you to access at your convenience
- Strategize to succeed and minimise risks with timely analysis of current and future market trends

Related Articles
-
Contractors submit bids for next phase of Duba port
2 June 2023
Contractors have submitted bids for the next phase of the Duba port expansion at Oxagon industrial city.
The bidders are Belgium’s Deme with Greece’s Archirodon; Van Oord of the Netherlands with South Korea’s Hyundai Engineering & Construction; a Belgian joint venture of Jan de Nul and Besix; Netherlands-based Boskalis with France’s Soletanche Bachy; South Korea’s Daewoo; and China Harbour Engineering Company.
The tender for the project’s second phase follows the award of a contract to deliver the first phase of the port expansion. A team of Boskalis, Besix and the local Modern Building Leaders (MBL) was awarded that estimated SR3bn ($800m) contract in mid-January.
The scope of the Duba port expansion package includes excavation and dredging, revetments for channel widening, demolition, container terminal quay expansion and earthworks, in addition to the development of a flexible quay, a roll-on/roll-off (RoRo) berth and quay walls to a marine services berth and a coast guard facility.
Jacobs is the main design consultant, with Moffatt & Nichol, IGO and Trent as the main sub-consultants.
Contractors are preparing to submit bids in June for a contract to build tunnels connecting the offshore elements of the Oxagon industrial city at Neom to the mainland.
The design-and-build contract involves digging a 6.5-metre-diameter tunnel using a tunnel boring machine (TBM) under the sea that will link the Neom Connector with the offshore elements of Oxagon port. It will house utilities including water pipelines, fibre optic cables and electricity cables.
Crown Prince Mohammed bin Salman launched Oxagon in late 2021. It will include onshore elements as well as floating structures offshore. Construction works on the 48 square-kilometre, eight-sided industrial city have already started.
An expanded Duba port is a critical component of Oxagon and the broader Neom development, as it will allow greater volumes of materials to be imported for the project. With an expected investment value of $500bn, Neom is the largest programme of construction work in the world.
https://image.digitalinsightresearch.in/uploads/NewsArticle/10909320/main.jpeg -
Egypt makes steady progress on Assiut refinery
2 June 2023
Egypt is making steady progress on the $2bn hydrocracking complex package that forms part of the wider Assuit oil refinery upgrade project, according to industry sources.
Assiut Oil Refining Company (ASORC), a subsidiary of state-owned Egyptian General Petroleum Corporation (EGPC), is the project operator.
“Work on the main units is continuing with no significant issues,” said one source.
During 2021, the project faced disruption due to issues related to the Covid-19 pandemic.
In 2023, many projects in Egypt’s oil and gas sector have been disrupted by currency issues due to the declining value of the Egyptian pound.
Most of the projects that the currency issues have significantly impacted have been in their early stages, with the problems related to the procurement of materials and equipment.
France’s Technip Energies is the main contractor performing engineering, procurement and construction (EPC) works on the Assiut hydrocracking complex, as part of a $2bn contract it was awarded by ASORC in February 2020.
In April 2021, Switzerland-based Burckhardt Compression announced being selected by Technip Energies as the gas compressor supplier for the hydrocracker package.
ASORC held a kick-off meeting for the project in September 2020.
Egyptian contractors Enppi and Petrojet are supporting Technip Energies on the project. Enppi has undertaken the engineering work, while Petrojet is carrying out construction work.
In 2021, contractors completed the construction of a $450m high-octane gasoline complex in the Assiut governorate as part of the broader $3.8bn Assuit oil refinery upgrade project.
Assiut refinery
The Assiut hydrocracking complex will be one of Egypt’s major strategic refineries, and will help meet growing local demand for cleaner products.
The project will also become the largest oil refining facility to be implemented in Upper Egypt so far.
Once completed, the project will transform lower-value petroleum by-products, such as mazut, into cleaner, higher-value products.
It is expected to have an output of about 2.8 million tonnes a year of Euro-5 diesel, in addition to other petroleum products.
https://image.digitalinsightresearch.in/uploads/NewsArticle/10908534/main3340.jpg -
Mawani implements $950m of Saudi port projects
2 June 2023
Saudi Ports Authority (Mawani) is implementing a series of projects over the coming 18 months as part of its efforts to improve and expand infrastructure at ports and increase their utilisation rates.
The programme, worth about SR3.5bn ($950m), comprises just over 150 projects, of which 48 are strategic in nature, 90 infrastructure-focused and 14 targeting security enhancements.
The most significant projects are:
At Jeddah Islamic Port
- A four-year contract to build a new road, interchanges and flyovers to link Gate 9 with the Al-Khumrah integrated logistics park.
- Deepening over three years of the north basin approach channel to 14 metres and the construction of a bull nose dike
At Ras al-Khair Port
- Increasing the draft depth of berths 11 and 12 to 16 metres
- A three-year job to widen and dredge the approach channel from 300 metres to 500 metres and deepen it by 3 metres to 19 metres
Other key investments include installing integrated security systems at Jeddah Islamic Port and King Abdulaziz Port in Dammam and constructing a new 40MVA substation at King Fahd Port in Yanbu.
The contracts are expected to be tendered and awarded by the end of 2024.
Mawani’s planned investment comes on the back of several major contracts awarded over the past 12 months, including an agreement with DP World to set up the Al-Khumrah logistics park, the reconstruction and expansion of the first and second container terminals at King Abdulaziz Port, and the upgrade of berth infrastructure and draft depths at Jeddah Islamic Port and King Fahd Port.
https://image.digitalinsightresearch.in/uploads/NewsArticle/10909176/main.jpg -
Dubai unveils new masterplan for Palm Jebel Ali
1 June 2023
Dubai has released details of the new masterplan for Palm Jebel Ali, an artificial island located south of Jebel Ali Freezone.
Double the size of Palm Jumeirah, Palm Jebel Ali will have 110 kilometres of shoreline and extensive green spaces. The development will feature over 80 hotels and resorts, along with a diverse range of entertainment and leisure facilities.
Strategic masterplan
The unveiling of the masterplan aligns with Dubai's commitment to doubling the size of its economy by 2033, as outlined in the Dubai Economic Agenda.
The project, approved by Sheikh Mohammed bin Rashid al-Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, includes seven connected islands, catering to approximately 35,000 families. The development also emphasises sustainability, with 30 per cent of public facilities powered by renewable energy.
MEED reported in January that local developer Nakheel had approached contractors to complete the reclamation works for Palm Jebel Ali.
As with Palm Jumeirah, it is estimated that it could take around 20 years for Palm Jebel Ali to reach its full development potential. Nakheel has previously secured AED17bn ($4.6bn) in funding to expedite the development of various projects, including the Dubai Islands and other waterfront schemes.
The upcoming dredging contract for Palm Jebel Ali is anticipated to involve 5-6 million cubic metres of material, contributing to the completion of the man-made offshore island.
While reclamation work for Palm Jebel Ali is mostly finished, the project was put on hold in 2009. Nakheel had made some progress with infrastructure development, including the construction of bridges on the island by Samsung C+T.
https://image.digitalinsightresearch.in/uploads/NewsArticle/10906519/main.jpg -
Swedish firm to deliver apartments for Neom
1 June 2023
Swedish modular home manufacturer SIBS has been awarded a contract to deliver 2,174 apartments for Neom.
The engineered equipment supply contract involves SIBS constructing 35 buildings within Neom’s primary staff accommodation and office cluster.
The apartments will cater to professionals involved in the planning, engineering and construction of Neom. The entire project is expected to be delivered and commissioned by the third quarter of 2024.
The $500bn Neom development in northwestern Saudi Arabia is the region’s largest construction project and employs thousands of staff.
Elements of the project that have been officially launched so far are The Line, Oxagon, Trojena and Sindalah. There are also plans for an international airport and a coastal strip of hotels known as the Gulf of Aqaba.
https://image.digitalinsightresearch.in/uploads/NewsArticle/10905700/main.gif