Saudi Aramco sees demand for blue hydrogen starting to increase early in the next decade, according to comments from the public giant’s chief technology officer.
Ahmad al Khowaiter told Bloomberg Television that the investment required to produce blue hydrogen is not large compared to the investment for conventional oil and gas projects, the biggest challenge facing the projects. blue hydrogen being the lack of demand to support investment in supply.
Blue hydrogen can be produced with steam reforming processes using fossil fuels combined with carbon capture and storage (CCS).
“We will see these investments occur when demand arises for blue ammonia and other low carbon hydrogens,” he told the outlet.
“The intensification will not happen until 2030. We are not going to see large volumes of blue ammonia until 2030, and this is based on the projections of the Hydrogen Council and the International Energy Agency. . “
Khowaiter also believes that blue ammonia projects would be established in a similar way to liquefied natural gas projects, which typically establish off-take agreements before making capital investments in the projects.
“From the moment you make clear sales agreements, you’re talking about a five to six year investment cycle to invest in production and conversion requirements,” Khowaiter told Bloomberg TV.
“You talk about a fairly long delay. “
While the company focused on blue hydrogen, Khowaiter claimed that Aramco had not ruled out continuing development of green hydrogen in the future, adding that the company had explored synergies between the development. of blue and green hydrogen.
Green hydrogen is produced using renewable energy to power electrolysis – splitting water molecules into hydrogen and oxygen.
However, he said the cost of producing blue ammonia was currently around one-fifth the cost of green ammonia projects, noting that blue ammonia projects were similar to natural gas projects, with an appearance CSC attached.
He claimed that the cost of the CCS portion of the projects would be around $ 1 billion per million tonnes of ammonia.
Aramco has previously indicated that fossil fuels will still dominate its asset portfolio for years to come, and when asked about the Saudi giant’s stance on renewables, Khowaiter said the company is “assessing all options” for reducing emissions. and provide sustainable energy.
“We are experimenting and we have in fact developed a number of renewable energy projects within our own company and we are considering increasing the use of renewable energy in our company, but it will have to be economically competitive and renewable energies are, up to a point, quite competitive today, ”he added.
Aramco last August exported the world’s first shipment of high-quality blue ammonia to Japan for use in zero-carbon power generation, a major step towards the sustainable use of hydrogen.
In January 2020, Aramco joined the Hydrogen Council as a managing member. The organization encourages collaboration between governments, industry and investors to provide advice on accelerating the deployment of hydrogen solutions globally.