Aramco: "Most Progress in Blue Hydrogen Negotiations with Han and Il"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Saudi Arabia's state-owned oil company Aramco is in discussions to supply blue hydrogen to Asia over the next five years, stating that negotiations with South Korea and Japan have made the most progress. This statement has drawn attention ahead of Crown Prince Mohammed bin Salman's visit to South Korea on the 17th.

According to Bloomberg on the 14th (local time), Ahmad Al-Kuwaiter, Chief Technology Officer (CTO), said in an interview at the 27th United Nations Climate Change Conference of the Parties (COP27) held in Egypt that "we are seriously negotiating with several parties regarding blue hydrogen supply, and among them, South Korea and Japan are the most advanced countries."

Blue hydrogen refers to hydrogen produced by reforming fossil fuels such as liquefied natural gas (LNG) while capturing the carbon generated during the production process. It is gaining attention as an eco-friendly energy source by minimizing carbon emissions. Aramco is expanding its investment in blue hydrogen to reduce the national economy's dependence on oil and to discover future growth engines. The company has decided to invest more than $100 billion (approximately 132.4 trillion KRW) in developing the Jafra gas field to procure gas for blue hydrogen production.

CTO Al-Kuwaiter stated that Aramco is investing billions of dollars in blue hydrogen and currently provides blue hydrogen only for testing purposes. Aramco plans to start by shipping blue hydrogen in the form of ammonia and aims to officially export blue hydrogen by 2027. Al-Kuwaiter emphasized, "We will invest mostly in blue hydrogen because it is more competitive," adding, "The cost is much cheaper. Clean hydrogen will become more competitive."

The negotiations between Aramco and South Korea and Japan appear to involve importing Aramco's LPG and cooperating in the process of producing blue hydrogen. Domestic companies such as Hyundai Heavy Industries and S-Oil have signed memorandums of understanding (MOUs) with Aramco for blue hydrogen cooperation from last year to recently, showing continuous related activities. Recently, Lotte Fine Chemical signed contracts to import 25,000 tons each of blue ammonia with Aramco subsidiaries SABIC and Ma'aden.