Saudi Aramco Signs Deal to Acquire Blue Hydrogen Business, Fueling Kingdom's Hydrogen Production Ambitions
Key Ideas
- Saudi Aramco finalized the acquisition of 50% of the Blue Hydrogen Industrial Gases Company (BHIG) from Air Products Qudra, signaling the kingdom's commitment to hydrogen production.
- The transaction includes options for Saudi Aramco to purchase hydrogen and nitrogen, enhancing its position in the global hydrogen market.
- Saudi Arabia, along with neighboring countries, is heavily investing in hydrogen technologies as part of efforts to reduce reliance on crude oil and establish itself as a leading hydrogen supplier.
- The deal is aligned with the kingdom's economic diversification agenda led by the Public Investment Fund (PIF), aiming to position Saudi Arabia as a key player in the future hydrogen economy.
Saudi Aramco, the Saudi oil giant, has finalized agreements to acquire 50% of the Blue Hydrogen Industrial Gases Company (BHIG) from Air Products Qudra (APQ). While the financial details of the transaction were not disclosed, the deal includes provisions for Saudi Aramco to purchase hydrogen and nitrogen. APQ, a joint venture between Air Products and Qudra Energy, a Saudi startup established in 2017, is at the center of this acquisition. This move reflects Saudi Arabia's significant investments in hydrogen, with the country and its neighbors dedicating substantial funds to emerge as major hydrogen suppliers. Saudi Energy Minister Prince Abdulaziz bin Salman al-Saud highlighted the kingdom's ambition to lead the global hydrogen market. The acquisition is part of a broader economic strategy to reduce Saudi Arabia's dependence on oil, overseen by the Public Investment Fund (PIF). Notably, Saudi Arabia has also greenlit an $8.4 billion green hydrogen plant developed by NEOM Green Hydrogen Company, a collaboration involving Air Products, ACWA Power, and NEOM, with PIF having substantial stakes in these entities. The investment underscores Saudi Arabia's commitment to sustainable and diversified energy sources, positioning the kingdom as a key player in the evolving hydrogen economy.