• Saudi Arabia leads with $1.5 trillion in hydrocarbon and energy projects as global firms eye Gulf opportunities.
• Blue hydrogen companies plan to increase their production capacity to 15.8 million tons per year.
• Oil and gas producers’ ramp up blue hydrogen investment with global pipeline capacity set to reach 15.8 million tons per year.
• Major projects underway include Abu Dhabi’s $16billion Hail and Ghasha gas development, Qatar’s LNG capacity expansion to 127 million tons per year, Saudi Arabia’s $25 billion Master Gas System Phase III, and Jafurah unconventional resource initiatives.
MEED has released a new report titled “The MENA Hydrocarbon and Power Projects Market 2024.” This comprehensive and authoritative research is invaluable for government decision-makers, developers, investors, contractors, consultants, and manufacturers in the Middle East’s oil, gas, and power sectors.
The magazine reported that the value of awarded contracts in the GCC alone reached a record $223 billion last year, an increase of almost 40% from the previous record, with the UAE and Saudi Arabia experiencing their best years ever.
The market outlook is expected to remain strong for some time, with the GCC having a staggering $2.9 trillion worth of hydrocarbon and power projects underway, of which Saudi Arabia accounts for more than $1.5 trillion.
The Middle East and North Africa (MENA) projects market has broken all records in 2023, driven by record spending levels from oil companies such as the UAE’s ADNOC, Saudi Aramco, and Qatar Energy. The region has never seen such a wave of activity.
The MEED report provides a comprehensive and detailed country-by-country analysis of the oil, gas, and power sectors in the Middle East and North Africa (MENA) region, covering Kuwait, Bahrain, Jordan, Iraq, Egypt, Algeria, and Morocco.
The report notes that as the market booms, international companies are entering the region to take advantage of the diverse and vast opportunities available. Due to intense competition for resources, project clients are reaching outside the region to attract companies to their project programs.
In parallel, contractual terms are becoming more flexible to attract contractors and suppliers, with the emergence of relatively new procurement models such as early contractor involvement, advanced mobilization, and competitions for project delivery models like FEED+EPC, among others.
The need to increase and maintain production capacities, the desire to maximize the hydrocarbon value chain, strong growth in electricity demand, and the rise of renewable energy are all factors driving this rapid project expansion.
The report reviewed major mega projects such as the $16 billion Hail and Ghasa sour gas development in Abu Dhabi, Qatar’s expansion of its LNG production capacity to 127 million tons per annum, Saudi Arabia’s $25 billion Master Gas System Phase III, and the Jafurahunconventional resource programs.
On the energy side, Saudi Arabia’s fast-track and ambitious renewable energy program, along with new waste-to-energy trends and nuclear capabilities, as well as the region’s increasing investments in transmission and distribution projects, are also critical factors for increased capital spending.
In conclusion, the magazine stated that this report aims to put these opportunities and challenges into context and under scrutiny. It not only quantifies the market opportunity through exclusive details about specific projects and tenders, but also demonstrates how companies can navigate market complexities, making it easier for anyone interested in the market to create a strategy and budget.
Blue hydrogen companies plan to increase their production capacity to 15.8 million tons per year.
MEED magazine predicted that oil and gas producers would increase their investment in blue hydrogen, as global blue hydrogen pipeline capacity is expected to grow by 3.3 million tons per year this year, reaching 15.8 million tons per year. This information comes from a new report issued by the global research and advisory company GlobalData.
The report noted that this increase represents 11% of the total active and future low-carbon hydrogen capacity, up by 4% from 2023, with oil and gas companies having invested heavily in this area.
The report also stated that oil giants such as Shell, Equinor, and ExxonMobil are currently leading in blue hydrogen production, but they still lag behind the overall market leader, Air Products & Chemicals.
Oil and gas companies account for 40% of the top 10 blue hydrogen producers in terms of net capacity, with Shell producing 1.07 million tonnes per year, Equinor 707,000 tonnes per year, ExxonMobil 550,000 tonnes per year, and Abu Dhabi National Oil Company 332,000 tonnes per year, ranking second, fourth, sixth, and ninth, respectively.
The report states that the total net capacity of the top tencompanies is 6.76 million tonnes per year, with oil and gas companies contributing 39% of this capacity, equivalent to 2.66 million tonnes per year.
Blue hydrogen refers to the production of hydrogen from fossil fuels, primarily through natural gas reforming or coal gasification, where most of the carbon dioxide emissions are captured and stored or used in products through carbon capture, utilization, and storage (CCUS) technologies.
Given the threat of climate change and the opportunity for financial gain, low-carbon hydrogen and its various production methods are on the rise.
Oil and gas companies have turned to blue hydrogen for several reasons, according to the report. By capturing hydrogen and carbon, these companies can leverage competitive advantages such as existing infrastructure in the exploration, production, and refining sectors.
Additionally, by producing blue hydrogen, oil and gas companies can continue their current industrial operations while future-proofing their businesses against potential climate sanctions, such as a carbon tax.
The magazine concluded by stating that by diversifying products, such as investing in blue hydrogen production, oil and gas companies can build low-carbon value chains at a time when demand for fossil fuels is expected to decline by the end of the decade.
