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Adnoc plans to develop a 'hydrogen ecosystem' in its latest spending push

November 23, 2020
oil and gas

Hydrogen is being trialled as a promising alternative to fossil fuels, particularly in transportation

Abu Dhabi National Oil Company plans to establish a ‘hydrogen ecosystem’ as it looks to meet growing global demand for the lighter and cleaner gas that is emerging as an alternative to fossil fuels.

Abu Dhabi Crown Prince Sheikh Mohamed bin Zayed, who is vice chairman of the emirate’s Supreme Petroleum Council, directed the state oil company to 'explore and pursue potential opportunities in the field of hydrogen projects” and “enhance” the UAE’s position in the field, the company said in a statement on Sunday as it detailed its investment plan for the next five years.

Adnoc’s plans to ramp up production of hydrogen, which is already used in its downstream sector, will help meet “emerging global demand” for the gas and for ammonia derived from it.

“Adnoc is well placed to lead the development of international value chains and establish a hydrogen ecosystem for the UAE in partnership with other Abu Dhabi entities,” the company said.

Adnoc has “many advantages” that would allow it to benefit from growth opportunities in the global market for the fuel. The state oil company will rely on existing modern and integrated infrastructure facilities as well as its rich reserves of natural gas to develop its hydrogen potential.

Saudi Arabia, the world's largest oil exporter, is also putting together a strategy to develop hydrogen production capabilities as it looks for alternative fuels to diversify its energy mix, according to the country's energy minister.

Hydrogen is being trialled as a promising alternative to fossil fuels, particularly in transportation. Clean hydrogen can slash green house gas emissions from the hydrocarbons sector by 34 per cent, according to BloombergNEF. The growth of hydrogen can fuel a €120 billion ($142.3bn) industry in Europe by 2050, according to Aurora Energy Research. Meanwhile, McKinsey estimates that the development of a hydrogen economy could generate $140bn in annual revenue by 2030 and help support 700,000 jobs in the US.

Earlier this month, Adnoc said it was exploring the potential for hydrogen as part of broader plans to lower its carbon intensity.

“We all have a role to play and we as an industry can do more on climate change,” Dr Sultan Al Jaber, Adnoc group chief executive and Minister for Industry and Advanced Technology told an online energy event.

“Adnoc is already one of the least carbon intensive producers in the world ... and [over] the next 10 years, we will reduce our greenhouse gas intensity by ... 25 per cent,” he added.

Hydrogen has become increasingly important as a viable alternative fuel in many global economies as they evaluate its potential as an alternative to hydrocarbons. Proponents and producers of hydrogen are also looking at ways to lower the element's carbon intensity since it is currently manufactured using large volumes of fossil fuel.

Several economies have made green hydrogen a key part of their renewable energy transition plans. Dubai plans to trial a hydrogen fuel cell-powered fleet of cars during next year's Expo event.


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