Adnoc, the Abu Dhabi state oil company, Adu Dhabi Investment Holding, and Mubadala Investment Co., two state investment funds, have teamed up in an Abu Dhabi Hydrogen Alliance to develop hydrogen production and export capabilities, joining a growing number of businesses betting on hydrogen, Argus reports citing Emirati media.
Bloomberg reports Adnoc and Mubadala will produce hydrogen both from natural gas-blue hydrogen-and from renewable energy-green hydrogen-and export it globally. The move reflects the growing prominence of hydrogen as a member of the world's future energy mix even though the production of green hydrogen-the ultimate goal of agenda setters-is still a lot more expensive than blue or grey hydrogen, produced from natural gas and coal.
"While we explore green hydrogen opportunities through the Alliance, Adnoc will place special emphasis on pursuing blue hydrogen projects by expanding on its existing hydrogen capacity, leveraging its significant gas reserves and best-in-class infrastructure, as well as its extensive customer relationships to help advance the hydrogen industry, both domestically and internationally," Argus quoted Adnoc's chief executive, Sultan Al-Jaber as saying.
The fact that it's a major oil producer that is betting on hydrogen is telling. In this respect, Abu Dhabi follows in the footsteps of the UAE's bigger ally, Saudi Arabia, which last year unveiled what should become the world's largest green hydrogen project. The facility, which will also produce ammonia, will be worth $5 billion, and be powered by a 4-GW combination of wind and solar farms in the NEOM smart city-the Kingdom's most ambitious economic transformation effort so far.
According to Bloomberg, like Saudi Arabia, the UAE is well positioned to benefit from its natural gas reserves, which it can use to produce blue hydrogen, and its location in a region with abundant sunshine, which means serious solar power potential to use to produce green hydrogen.
Adnoc is already producing hydrogen, at about 300,000 tons annually. It uses the chemical in its downstream operations, Bloomberg notes. The company now plans to boost this output to mover 500,000 tons annually
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
Comments
The UAE in particular ADNOC neither needs hydrogen nor is capable of producing enough to export. It is bad economics.
Blue hydrogen produced from natural gas consumes far more energy than it gives. In this case, it is far more efficient and economically beneficial for the UAE to use its modest proven reserves of natural gas estimated at 209.7 trillion cubic feet (tcf) for electricity generation rather than being forced to import gas to satisfy its domestic needs as is the case now with its gas imports from Qatar.
And rather than producing green hydrogen from renewable energy, it is again far more efficient and economically beneficial to use renewables to generate electricity thus saving a big chunk of its proven gas reserves for the production of more petrochemicals for export thus adding more value to its exports.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London