Saudi Arabia explores hydrogen opportunities with Germany amid push for global market share

Saudi Arabia explores hydrogen opportunities with Germany amid push for global market share
Blue hydrogen is created through traditional methods but the carbon is captured. (Shuttertstock)
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Updated 11 August 2021

Saudi Arabia explores hydrogen opportunities with Germany amid push for global market share

Saudi Arabia explores hydrogen opportunities with Germany amid push for global market share
  • Saudi Ministry of Energy to work with Germany's Federal Ministry of Economic Affairs and Energy
  • Saudi Aramco said on Monday that it is looking for off-take agreements for blue hydrogen in its key markets

RIYADH: Saudi Arabia is turning to Germany to explore opportunities in hydrogen as the Kingdom is vying to be one of the largest players in the fuel of the future.
The Saudi Cabinet last night approved a memorandum of understanding between the Ministry of Energy and Germany’s Federal Ministry of Economic Affairs and Energy to explore opportunities in the hydrogen field, state news agency SPA said on Tuesday.
This agreement comes at a time when state-owned energy giant Saudi Aramco is planning to expand in production of blue hydrogen, while the futuristic project of NEOM is working on producing its first green hydrogen in 2025.
Although the agreement was signed yesterday, Germans were heavily involved and active over the past two years with Saudi counterparts on hydrogen discussions. NEOM has already a team of Germans leading its hydrogen unit, with Peter Terium, a Dutch energy executive and former Chief Executive Officer of innogy and RWE, as head of its energy sector.
Saudi Aramco said on Monday that it is looking for off-take agreements for blue hydrogen in its key markets to expand its output and sees strong potential for growth. Aramco is talking to potential buyers in Japan and South Korea, which it says will be major markets for the fuel, CEO Amin Nasser said on an investor call.
Blue hydrogen uses the traditional Haber-Bosch method of turning natural gas into hydrogen but captures the carbon emissions, while green hydrogen is created with renewable energy and water.
Hydrogen is converted into ammonia for long-distance transportation.
In September last year, Saudi Aramco and Japan’s Institute of Energy Economics (IEEJ) announced the first shipment of blue ammonia from Saudi Arabia to Japan.
The shipment, which was in partnership with Saudi Basic Industries Corporation (SABIC), contained forty tons of high-grade blue ammonia, and is meant for use in zero-carbon power generation.
Nasser also said on Monday Saudi Aramco is in talks about renewable investments with the nation’s wealth fund PIF and Acwa Power.


Saudi Arabia issues S2.27bn in domestic sukuk

Saudi Arabia issues S2.27bn in domestic sukuk
Updated 18 sec ago

Saudi Arabia issues S2.27bn in domestic sukuk

Saudi Arabia issues S2.27bn in domestic sukuk

RIYADH: Saudi Arabia issued SR8.5 billion($2.27 billion) in domestic sukuk for the month of October, the National Debt Management Center said on Tuesday.

The Islamic bonds were split into two tranches: SR3.905 billion  due in 2029, and another of SR4.595 billion due in 2033.


IMF official hopes Lebanon program talks can start before new year

IMF official hopes Lebanon program talks can start before new year
Updated 40 min 45 sec ago

IMF official hopes Lebanon program talks can start before new year

IMF official hopes Lebanon program talks can start before new year

An executive director at the International Monetary Fund said on Tuesday that he hopes program negotiations with Lebanon could start before the new year to try to pull the country's economy out of a crisis.

An IMF program is widely seen as the only way Lebanon can unlock foreign financial help which it desperately needs to emerge from one of the world's sharpest economic depressions.

“We hope the effort being made today will lead to access to all the data and to sufficient information ... all required data must be available first,” IMF’s Mahmoud Mohieldin said in a statement.

Mohieldin's remarks come after a meeting with Lebanon's Prime Minister Najib Mikati on Tuesday.

He added that any conditions the IMF would require “will not be harsher than what we see in Lebanon today.”

“I imagine that after the success of this program ... the required confidence can be restored to the economy and we positively bet on the ability of the economy and Lebanese people to respond to positive signals,” Mohieldin said.


Saudi economy to grow by 7.3% next year: Capital Economics

Saudi economy to grow by 7.3% next year: Capital Economics
Updated 19 October 2021

Saudi economy to grow by 7.3% next year: Capital Economics

Saudi economy to grow by 7.3% next year: Capital Economics

CAIRO: Economic research firm Capital Economics expects the Saudi economy to grow by 2.5 percent this year and by an impressive 7.3 percent in 2022. 

When compared to the firm’s pre-pandemic estimates, the country’s GDP would be about 3 percent higher by the end of 2023.

William Jackson, Chief Emerging Market Economist at CE, added: "This would make the Saudi economy one of the few in the world where GDP will be above its pre-pandemic trend over the forecast period.”

The company predicts that higher oil output, along with a less contractionary fiscal policy, would drive the economy’s recovery next year.

Saudi inflation is also projected to edge a little higher towards 1 percent by the end of this year and the first quarter of 2022. 

Following this period, the rise in consumer prices is expected to be in the 1-1.5 percent range. However, it could fall to a lower level in case the VAT rate dropped, the company pointed out.

The new report also offered an outlook for the whole region. Gulf countries’ economic recovery as a whole is expected to gain momentum due to their strong vaccination rates and higher oil production.

In the UAE, rising oil output and the World Expo are expected to fuel the economy’s growth. 

Despite an expansion in economic activity driven by rising gas output, Qatar’s rebound could prove to be weaker than other GCC countries due to risks in the non-oil sector.

Meanwhile, Oman and Bahrain could face setbacks in their recoveries as they grapple with contractionary fiscal policies and mounting public debt.

In addition, Egypt’s recovery could gain pace in the next quarters as the economy re-opens. However, a weak vaccination campaign and a tight fiscal policy might hamper this trend. 

The firm expects the country’s economy to grow by 4.8 percent and 5.8 percent in 2020 and 2021 respectively.


TASI up 0.3 percent; supported by the banking sector: Market Wrap

TASI up 0.3 percent; supported by the banking sector: Market Wrap
Updated 19 October 2021

TASI up 0.3 percent; supported by the banking sector: Market Wrap

TASI up 0.3 percent; supported by the banking sector: Market Wrap

RIYADH: The Tadawul All Share Index rose on Tuesday by 0.3 percent, or 34 points, to 11.792 points. 

Some 198.6 million of shares changed hands in 341,000 deals, with heavy trading in ACWA Power, AL Rajhi, and Petro Rabigh. 

The market's rise is supported by an increase in banking shares, led by Al-Rajhi Bank, which rose by 3.1 percent — the highest increase since 2006.

Etihad Etisalat shares also rose by 2.8 percent, supported by the company's profit growth in the third quarter, which amounted to SR281 million — up 56.6 percent. The firm also reported a 7.4 percent growth in revenues.

The biggest winners today were National Buildings and Marketing by 12.1 percent, Shams by 4.3 percent, Al Naqool by 3.5 percent, Al Rajhi by 3.1 percent, Mebco by 2.9 percent, Mobily and Saudi Re by 2.8 percent. 

Other News:

Arabian Contracting Services Co. announced that 1.5 million shares will be offered to individual subscribers, the equivalent of 10 percent of the total shares offered for public subscription. The price of the offering ranges between SR90-100 per share, according to the director of the offering, GIB Capital.

The Arab Company for Internet and Communications Services "Solutions" achieved a net profit with the amount of SR257 million in the third quarter of 2021, compared to SR240 million for the same period last year — an increase of 7.08 percent 

The company said that the profit growth is mainly due to the increase in gross profit by 6.7 percent (SR29 million), thanks to a rise in total revenues by 0.46 percent (SR 9million) and a decrease in revenue costs by 1.3 percent (SR20 million)

The parallel stock market index Nomu closed up 24368.26 points, or 2.23 percent, where 464.4 thousand shares were traded, with 1885 deals. 

The biggest fallers today were Yansab by 3.5 percent, Arabia Insurance cooperative, Alinma Tokio Marine, and Petro Rabigh by 3.1 percent respectively, and Sumou and United Cooperative Assurance by 2.9 percent each.


Bitcoin futures highlight some pitfalls for new exchange-traded funds: Crypto Wrap

Bitcoin futures highlight some pitfalls for new exchange-traded funds: Crypto Wrap
Updated 19 October 2021

Bitcoin futures highlight some pitfalls for new exchange-traded funds: Crypto Wrap

Bitcoin futures highlight some pitfalls for new exchange-traded funds: Crypto Wrap

RIYADH: Bitcoin hit a six-month high and was within striking distance of its all-time peak on Tuesday, as traders bet an anticipated listing of a futures-based US exchange-traded fund (ETF) could herald investment flows into cryptocurrencies.

Bitcoin has been known for its volatility for 13 years and has recently been trading fairly flat, but it has been surging around 40 percent this month on hopes that the emergence of Bitcoin ETFs will see billions of dollars managed by pension funds and other large investors flow into the sector.

ProShares Bitcoin Strategy ETF is expected to list on Tuesday under the ticker BITO, provided the U.S. regulator, the Securities and Exchange Commission, does not object.

Analysts said the ETF would also likely simplify access to cryptocurrencies for retail investors.

"It can attract flows from investors who prefer the ease of an ETF over the perceived risk of an exchange," Martha Reyes, head of research at crypto exchange Bequant said.

Other analysts have also cautioned that the fund will not invest directly in bitcoin rather in Chicago-traded futures, so any immediate effects of the flows may be limited.

Crypto ETFs have launched this year in Canada and Europe amid surging interest in digital assets. VanEck and Valkyrie are among fund managers pursuing such products listed in the US, although Invesco on Monday dropped its plans for a futures-based fund.

The Nasdaq on Friday approved the listing of the Valkyrie Bitcoin Strategy ETF and Grayscale, the world's largest digital currency manager, is planning to convert its Grayscale Bitcoin Trust into a spot bitcoin ETF, CNBC reported.

The launch of the first bitcoin futures ETF on Tuesday marks a major step toward legitimizing the cryptocurrency, but some investors in such funds may face higher costs compared with buying the digital currency itself, Reuters reported.

ProShares will be backed by the CME Group's bitcoin futures instead of the actual virtual asset itself. Its offering is expected to lead to more launches of futures-based ETFs in the coming days and weeks after years of regulatory roadblocks.

Market participants generally praised the relative ease and safety of owning an exchange-traded product instead of buying bitcoin from cryptocurrency exchanges and brokers.

Investors won't have to worry about custody and securing their digital wallets, although analysts said there are top-tier exchanges that offer these services to their customers as well.

Futures

A futures-based ETF price will not necessarily match the current price of the underlying asset.

"In most cases, such futures funds based on commodity assets such as gold tend to underperform physical ones," Mikkel Morch executive director at crypto and digital assets hedge fund ARK36 said.

In addition to the risk of a futures-based bitcoin fund underperforming bitcoin, it also comes with the cost of the futures roll-over, some analysts said. However, analysts believe investors will still buy the futures-based funds despite the higher cost.

Trading

Bitcoin, the leading cryptocurrency in trading internationally, traded higher on Tuesday, rising by 0.99 percent to $62,494 at 5:20 pm Riyadh time. While Ether, the second most traded cryptocurrency, traded at $3,813, up 0.57 percent, according to data from Coindesk.