Saudi Arabia, Germany in landmark alliance on green hydrogen

Prince Abdul Aziz bin Salman, the Kingdom’s energy minister, signed a memorandum of understanding (MOU) with Peter Altmaier, Germany’s minister for economics and energy. (Screenshot)
Prince Abdul Aziz bin Salman, the Kingdom’s energy minister, signed a memorandum of understanding (MOU) with Peter Altmaier, Germany’s minister for economics and energy. (Screenshot)
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Updated 12 March 2021

Saudi Arabia, Germany in landmark alliance on green hydrogen

Prince Abdul Aziz bin Salman, the Kingdom’s energy minister, signed a memorandum of understanding (MOU) with Peter Altmaier, Germany’s minister for economics and energy. (Screenshot)
  • Groundbreaking MOU recognized both countries’ shared objective to create appropriate environment for economically and ecologically sustainable development

DUBAI: Saudi Arabia and Germany have launched a landmark energy partnership to help implement the goals of the Paris Agreement on climate change.

The two countries will cooperate closely in the emerging fuel of “green” hydrogen, which many experts regard as a “fuel of the future,” in the global effort to reduce harmful greenhouse gas emissions.

Prince Abdul Aziz bin Salman, the Kingdom’s energy minister, signed a memorandum of understanding (MOU) with Peter Altmaier, Germany’s minister for economics and energy, in a ceremony organized from Riyadh.

The groundbreaking MOU recognized both countries’ shared objective to create an appropriate environment for economically and ecologically sustainable development, and to work together toward implementing the goals of the Paris Agreement to reduce greenhouse gas emissions.

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The groundbreaking MOU recognized both countries’ shared objective to create an appropriate environment for economically and ecologically sustainable development, and to work together toward implementing the goals of the Paris Agreement to reduce greenhouse gas emissions.

The agreement seeks to promote cooperation between Saudi Arabia and Germany regarding the generation, processing, use and transportation of clean hydrogen for the benefit of both countries.

Prince Abdul Aziz said: “The potential of hydrogen has always been there, but now it is entering the mainstream of strategic energy thinking. As countries work jointly to address climate change, we affirm our commitment to lead the response in managing emissions, while continuing our socio-economic development. Our commitment to tackle climate change is firm, a commitment I know Germany shares.

“It is also a compelling investment proposition, with huge investment opportunities in hydrogen over the coming decades,” he added.

Saudi Arabia has targeted “green” hydrogen — made from renewable sources such as wind and solar power — as a priority for the energy sector’s diversification under the Vision 2030 strategy, and is in the process of building a facility to generate the fuel on a large scale at the NEOM megacity.

“Saudi Arabia is blessed with an abundance of wind and solar energy, in addition to our renowned hydrocarbon resources. The Kingdom has all the ingredients to be a world leader in the field of hydrogen,” the prince added.

The Kingdom last year also exported the first-ever shipment of “blue” hydrogen — manufactured as a byproduct of oil and gas production — to Japan to power clean electricity generation there.

Germany, which is trying to wean itself off coal, regarded as the worst form of hydrocarbon pollutant, last year launched its National Hydrogen Strategy and passed legislation to enable the incorporation of “green” hydrogen as a fuel for national electricity generation.

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Saudi Arabia is building a $5-billion green fuel plant for export in a bid to become the world’s largest supplier of hydrogen, Bloomberg reported. Click here for more.

Scientists and economists have endorsed the potential value of hydrogen for some time, but in the past it has been expensive to produce compared with hydrocarbon fuels, and difficult to transport because of its explosive qualities.

But the cost is coming down, along with cheaper renewable energy sources, and engineers are working to make it more practical to transport across long distances.

Prince Abdul Aziz told a recent conference that the Kingdom might consider building a green hydrogen pipeline to Europe if the economic rationale was viable.

He highlighted the benefits of the Saudi-German collaboration in technology transfer, research and development and workforce enhancement, as well as the economic impact.

“Germany’s excellence in technology is world renowned, as is its status as a global economic power. Therefore, the fact that Germany and Saudi Arabia have joined together in this strategic cooperation is a testament to our serious mutual intentions,” he said.

“Relations between our two countries go back many decades, and this MOU will lend additional support to further our friendship for generations to come.”

The collaboration between Europe’s biggest economy and technology powerhouse, and the Middle East’s leading energy supplier was welcomed by energy experts.

Joseph McMonigle, secretary-general of the International Energy Forum, told Arab News: “Both Saudi Arabia and Germany have embarked on new net-zero emission pathways, but experts report that the emissions cut needed to meet the world’s climate goals need to come from technologies that do not exist yet.

“Green hydrogen is one example, and the missing link between renewables and hydrocarbon technologies that holds great promise for the energy transition,” he added.


Warnings at FII about risks of saving the environment and ignoring the economy

Warnings at FII about risks of saving the environment and ignoring the economy
Updated 28 October 2021

Warnings at FII about risks of saving the environment and ignoring the economy

Warnings at FII about risks of saving the environment and ignoring the economy
  • ‘Energy supply crunch is looming if underinvestment in oil and gas projects continues’

RIYADH: It was surprising to see that the big deal makers and large asset managers are so displeased with the fast pace of the environmental action at the expense of global economic recovery.
For years, oil-producing countries such as Saudi Arabia have warned that the world is moving too fast to reduce carbon emissions, with the result that less money is being channeled into hydrocarbon projects.
These concerns were made clear by Prince Abdulaziz bin Salman, Saudi energy minister, and other leading Saudi officials.
Warnings from oil producers are rarely welcomed but as the reality bites, big investors are now making it clear that an energy supply crunch could be just around the corner if the underinvestment in oil and gas projects continues.
At the Future Investment Initiative Forum in Riyadh, top Wall Street firms warned of the risk of a sustained increase in oil prices.
BlackRock’s Larry Fink, the world’s top asset manager, said there is “high probability” of oil hitting $100 a barrel.
He reiterated the concerns he raised during the recent Middle East Green Initiative Summit, when he made it clear that he supports investment in hydrocarbons because the world needs affordable energy sources.
Prominent players from Saudi Arabia’s Public Investment Fund, asset-management firm Ninety One, and HSBC Holdings all called for the pace of investment in hydrocarbons to increase.
Fahad Al-Saif, the head of Global Capital Finance at the PIF, told delegates: “The essence of the urgency is not there yet. There has to be collaboration, across global institutions; it is a trust problem in delivering.” He added: “I worry about the balance of the pace at which we are moving.”
His concerns were echoed by John Green, chief commercial officer at Ninety One, who said between 60 and 70 percent of the conversations he has with clients are about energy.
Prince Abdulaziz bin Salman said Saudi Arabia’s ambitious plans to cut carbon emissions to net zero by 2060 do not mean there will be less investment in oil.
Despite the pledges to reach net zero and become a global leader in renewable energy, the nation wants to remain one of the leading oil-producing countries in the world, according to a strategy announced by the minister.
The “Claim and Retain Leadership” blueprint reflects the Kingdom’s desire to maintain its dominance in the oil sector, with “preeminence in energy markets” listed as one of its top goals.


The Red Sea Project CEO Pagano doesn’t rule out an IPO within five years

The Red Sea Project CEO Pagano doesn’t rule out an IPO within five years
Updated 28 October 2021

The Red Sea Project CEO Pagano doesn’t rule out an IPO within five years

The Red Sea Project CEO Pagano doesn’t rule out an IPO within five years

RIYADH: The CEO of The Red Sea Development Company has refused not rule out the possibility of selling a stake in the company, or one of its subsidiaries, to the public in an initial public offering within two to five years, once the company is fully operational and stable.

“We have a number of different ideas as to how we take the business forward,” John Pagano told Arab News in an interview on Wednesday on the sidelines of the Future Investment Initiative Forum in Riyadh. “We can IPO the whole business, we can IPO parts of the business or we can look at different types of structure.

“So we could create a real-estate investment trust and sell the assets into the REIT, (and) we could own part of (the REIT) and open it up to large numbers of retail investors. I think that’s a very attractive proposition but a number of different options exist.”

The Red Sea Project is fully owned by Saudi Arabia’s Public Investment Fund, and Pagano said his company “is very well advanced” in terms of capital needs. The capital structure for the first phase of the project is already in place and the shareholder has committed the equity needed for this initial phase of development, he added.

The PIF has committed about $15 to $16 billion to the project, and last year the TRSDC was able to raise SR14.12 billion ($3.8 billion) in green bonds through a project-financing scheme for the first phase of development, Pagano said, adding: “So the Red Sea is fully capitalized.”

Talking about the recent merger between TRSDC and AMAALA, another megaproject owned by the PIF, Pagano said that they will remain distinct in terms of identity, branding and focus but will share characteristics in terms of sustainability.

“AMAALA was going to go down a different path for their own power and we’ve changed that,” he explained. “So we are going follow a similar approach with the public-private partnership to build the 100 percent renewable-energy system for them, too.

“They, too, can be sustainable and that was not the case before, so it is really leveraging opportunities where we use our respective skill set to make both destinations better.

“We will keep them distinctively apart because they are different and unique. AMAALA is very much focused on wellness and the Red Sea is much more focused on ecotourism and nature, so I think they have very separate, very different, positioning and will have to be coexist. We are not building that many hotels that I would be worried about it.”

Turning to sustainability, Pagano said that they are using the platform provided by the Red Sea Project to really drag the industry along with them.

“I think that by us doing what we doing, people will have to follow,” he added. “If they don’t follow they will not succeed because I think the consumers of today, both before and especially after COVID, are much more aware of the choices they make, and they are going to be much more aware of the environmental impact and they are going to choose to go to destinations that respect the environment, that protect the environment, that go beyond sustainability.

“We’re saying sustainability is no longer enough and we need to think about regeneration, we need to think about how to make our place better — and that is what the Red Sea is doing and we are going to do the same thing for AMAALA.”


Saudi energy minister and Nigerian petroleum minister discuss global oil market

Saudi energy minister and Nigerian petroleum minister discuss global oil market
Updated 28 October 2021

Saudi energy minister and Nigerian petroleum minister discuss global oil market

Saudi energy minister and Nigerian petroleum minister discuss global oil market
  • Meanwhile, Nigeria's president left Madinah heading to Jeddah

RIYADH: Saudi Arabia’s Minister of Energy Prince Abdul Aziz bin Salman held talks with Nigerian Minister State for Petroleum Resources Timipre Sylva in the capital, Riyadh, on Wednesday.
During the meeting, they discussed the global oil market, and strengthening joint cooperation among the OPEC countries to maintain market stability.
Meanwhile, Nigerian President Muhammadu Buhari left Madinah on Wednesday heading to Jeddah, after he visited and performed prayers at the Prophet’s Mosque.

Nigeria’s President Muhammadu Buhari leaves Madinah for Jeddah after visiting the Prophet’s Mosque on Wednesday, Oct. 27, 2021. (SPA)

 


Algerian gas to Spain will bypass Morocco: Ministers

Algerian gas to Spain will bypass Morocco: Ministers
Updated 28 October 2021

Algerian gas to Spain will bypass Morocco: Ministers

Algerian gas to Spain will bypass Morocco: Ministers
  • In August Algeria cut diplomatic ties with its Maghreb neighbour Morocco which it accused of "hostile actions"
  • Algeria had been using the Gaz-Maghreb-Europe (GME) pipeline since 1996 to deliver several billion cubic metres per year to Spain and Portugal

ALGIERS: Algeria will from now on deliver its natural gas to Spain exclusively through an undersea pipeline, ministers from both countries reportedly said Wednesday, after Algiers abandoned use of a line through Morocco.
In August Algeria cut diplomatic ties with its Maghreb neighbor Morocco which it accused of “hostile actions.”
Algeria, Africa’s biggest natural gas exporter, had been using the Gaz-Maghreb-Europe (GME) pipeline since 1996 to deliver several billion cubic meters (bcm) per year to Spain and Portugal.
But the GME contract is due to expire at the end of October, and Algiers decided not to renew it because of the diplomatic tensions with Rabat.
Experts had said the alternative undersea line, known as Medgaz, does not have the capacity to make up the shortfall. They earlier feared that supplies could be cut, just as energy prices soar in Europe ahead of winter.
Medgaz is already operating near its full capacity of eight bcm per year — around half total Algerian gas exports to Spain.
Algeria’s Minister of Energy and Mines Mohamed Arkab, speaking after talks with Spain’s Minister for Ecological Transition Teresa Ribera, said his country, through state energy firm Sonatrach, “will honor its commitments to Spain,” according to the official APS news agency.
“The Spanish partners were reassured that Algeria will provide all the supply expected. We equally commit ourselves to making all deliveries through Algerian installations, via the Medgaz pipeline and gas conversion complexes,” Arkab said.
He spoke of extending capacity of the Medgaz line and an expansion of liquefied natural gas exports by sea.
Sonatrach and its Spanish partner Naturgy have vowed to boost Medgaz’s capacity to 10 bcm per year in the coming months, but that still falls far short of the total needed at current levels.
Maghreb geopolitics expert Geoff Porter earlier told AFP that the shipping option did not make financial sense.
According to APS, Ribera said she had been assured by her Algerian counterpart of “arrangements taken to continue to assure, in the best way, deliveries of gas through Medgaz according to a well determined schedule.”
Algeria and Morocco had seen months of tensions, partly over Morocco’s normalization of ties with Israel in exchange for Washington’s recognizing Rabat’s sovereignty over Western Sahara.
Rabat rejected the various accusations of hostile acts which Algeria levelled at its neighbor.


DWF Group to open regional headquarters in Riyadh, says global CEO

DWF Group to open regional headquarters in Riyadh, says global CEO
Updated 27 October 2021

DWF Group to open regional headquarters in Riyadh, says global CEO

DWF Group to open regional headquarters in Riyadh, says global CEO

RIYADH: DWF Group, UK’s largest listed legal business, will set up its regional headquarters in Saudi Arabia’s capital Riyadh.

Sir. Nigel Knowles, the group’s global CEO, made the announcement at the Future Investment Initiative in Riyadh on Wednesday.

“We’re here in Riyadh, and it’s great to be back once again to announce that we’re going to make Riyadh our regional headquarters for our Mindcrest and connected businesses to offer those professional services to businesses in the region,” Knowles told Arab News.

“But specifically Saudi Arabia, which is a very dynamic country and we’re absolutely certain that we can be relevant to all the people and businesses here with positive outcomes for everyone,” he added.

He explained that the group is  divided into three divisions on a global basis.

“One is legal advisory, which is the traditional law firm services, the next one is Mindcrest, which deals with document management, e-discovery and a whole heap of money services requirements for clients,” he said.

They also have a connected services business which offers a whole range of services which are not legal services, but closely connected to legal services. 

“So we’ve got three offerings effectively, which makes us a legal business, not a law firm,” he said.

Mohab Khattab, DWF Arabia’s incoming CEO, said DWF is a very unique law firm as it is publicly traded and for what it offers in its three different types of businesses. 

“One is legal advisory — but what we’re doing for Saudi Arabia is we’re working in association with a local law firm to provide legal advisory services,” he told Arab News.

“The other two are more of quasi legal types of services, almost consulting like services. The first one is through a company called Mindcrest, which provides managed legal services. So, for example, offering contracts, management, risk management or compliance types of services — and so this offers a more commercially oriented service to the client that is very unique to  Saudi Arabia and actually the region,” he added.

Khattab said the existing operations with Dubai and with Doha will now come under the Saudi regional headquarters.

“The other, which is the third business, is called connected, and we’re offering them through applications, even mobile applications for companies,” he said.

“So for example, corporate governance, types of services for companies, services, for example, for companies who have incidence management. So as an example, an insurance company can use this for their insurance investigators for accidents or, for example, any kind of incidents at an industrial complex,” he explained.