Enoc partners with Japanese IHI to establish low-carbon hydrogen plant in UAE


Dubai-based Emirates National Oil Company has signed an initial agreement with Japanese heavy-industry manufacturer IHI Corporation to explore the establishment of a low-carbon hydrogen and ammonia plant in the United Arab Emirates States, supporting the Emirates’ energy transition efforts.

The fuel produced will be exported to Japan and supplied to the United Arab Emirates as well as the wider region for bunkering and other purposes, the Dubai media office said in a statement on Thursday.

The move, which is part of Dubai’s strategy to become a sustainable global hub for the green economy, is part of the UAE’s overall energy transition efforts.

“We continue to explore partnerships that safeguard the future for generations to come,” said Saif Al Falasi, Managing Director of Enoc Group.

“Our collaboration with IHI Corporation demonstrates our commitment to supporting the UAE’s energy transition efforts while advancing the Dubai 2050 clean energy strategy.”

This makes Enoc the latest UAE company to make a foray into the booming hydrogen industry, which is expected to reach a valuation of $183 billion by 2023, according to Fitch Solutions.

Hydrogen, which can be produced from both renewable energy and natural gas, is expected to play a key role in the coming years as economies and industries transition to a low-carbon world to mitigate climate change.

Low-carbon ammonia, which is made from nitrogen and clean hydrogen, is the most promising large-scale hydrogen carrier and potential clean fuel for a wide range of applications, including transportation, power generation and fertilizer production.

The UAE’s energy strategy aims to double the contribution of clean energy in the total energy mix to 50% by 2050 and reduce the carbon footprint of electricity generation by 70%.

The Emirates, which aims to achieve net zero emissions by 2050, plans to invest Dh600 billion ($163.37 billion) over the next three decades to meet growing energy demand and ensure sustainable growth of the country’s economy.

Enoc and IHI will conduct pre-feasibility and feasibility studies for a “full-scale” production plant, the statement said.

“The UAE is well positioned to produce and export green ammonia thanks to its abundant renewable energy and strong maritime trade infrastructure, which cements its place as a critical hub for global shipping,” said said Jun Kobayashi, general manager of IHI Corporation.

Abu Dhabi’s national oil company, which produces most of the UAE’s crude oil, is already a major producer of hydrogen and ammonia, with more than 300,000 tonnes of hydrogen produced annually at its complex Ruwais industrialist.

Two weeks ago, Germany officially received its first batch of hydrogen-based ammonia from the United Arab Emirates.

In August last year, Adnoc sold its first shipment of blue ammonia to Japanese trading house Itochu, followed by similar deals with Japan’s Idemitsu and Inpex.

Hydrogen comes in a variety of forms, including blue, green, and gray. Blue and gray hydrogen is produced from natural gas, while green is derived from the separation of water by electrolysis.

Japan, one of the world’s biggest buyers of liquefied natural gas, has limited its use of natural gas as prices soared following Russia’s military offensive in Ukraine.

Current tensions over gas supply have led to power shortages in several parts of the developing world that depend on imported gas, including Pakistan and Bangladesh.

Meanwhile, major gas growth markets, such as India and China, have sharply reduced their LNG imports in 2022.

Updated: November 10, 2022, 9:25 a.m.


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