Blue hydrogen demand to ramp up after 2030

Saudi Aramco sees demand for blue hydrogen beginning to ramp up at the start of the next decade, according to comments made by the state-run giant’s chief technology officer, Report informs, referring to foreign media.

Ahmad al Khowaiter told Bloomberg Television that the investment required to produce blue hydrogen was not significant compared to investment for conventional oil and gas projects, with the largest challenge facing blue hydrogen projects being the lack of demand to underpin investment in supply.

“We will see those investments happen when the demand appears for blue ammonia and another low-carbon hydrogen,” he told the news outlet. “The scale-up isn’t going to happen before 2030. We’re not going to see large volumes of blue ammonia before 2030, and that’s based on the projections of both the Hydrogen Council and the International Energy Agency.”

Khowaiter also believes that blue ammonia projects would be established in a similar method to liquefied natural gas projects, which typically develop offtake agreements before making capital investments in projects. “From the time you make clear offtake agreements, you’re talking about a five- to six-year capital cycle to invest in the production and conversion requirements,” Khowaiter told Bloomberg TV. “You’re talking about a pretty long timescale.”

While the company has been focused on blue hydrogen, Khowaiter claimed Aramco had not ruled out pursuing green hydrogen developments in the future, adding that the company had been exploring synergies between blue and green hydrogen development.

Green hydrogen is produced using renewable energy to power electrolysis — splitting water molecules into hydrogen and oxygen.

However, he stated the cost of producing blue ammonia was currently about one-fifth the cost of green ammonia projects, noting that blue ammonia projects were similar to natural gas projects, with a CCS aspect attached.

He claimed that the cost of the CCS part of the projects would be around $1 billion per million tonnes of ammonia.