ACWA Power, the Saudi renewables developer, has entered into a significant green hydrogen supply agreement with SEFE, Germany’s state-owned gas company. The memorandum of understanding (MOU) outlines plans to deliver 200,000 tonnes of green hydrogen annually to Germany by 2030.
Key Details of the Saudi-German Hydrogen Partnership
- Initial supply volume: 200,000 tonnes of green hydrogen per year by 2030
- Energy equivalent: 7.9 TWh (higher heating value)
- Coverage of SEFE customer demand: approximately 4% of current natural gas energy requirements
- Project structure: SEFE to serve as both co-investor and offtaker for renewable hydrogen and ammonia projects
Strategic Importance and Project Scope
The agreement, witnessed by Saudi energy minister Abdulaziz bin Salman Al Saud and German finance minister Jörg Kukies, represents a significant step in establishing a hydrogen corridor between Saudi Arabia and Germany. However, the source location for hydrogen production remains undefined, with potential supply coming from ACWA Power’s various projects across the Middle East and North Africa region.
ACWA Power’s Green Hydrogen Portfolio
Current Projects
- Neom Project (Saudi Arabia)
- Capacity: 2.2 GW
- Status: Under construction
- Note: Full production already contracted to Air Products for ammonia conversion
- Tunisia Project
- Capacity: 2 GW electrolyser
- Production: 200,000 tonnes H2 annually (first phase)
- Export route: SoutH2 pipeline to Italy and Europe
- Egypt Project
- Production: 600,000 tonnes ammonia annually
- Equivalent to: 108,000 tonnes H2 per year
- Uzbekistan Facility
- Capacity: 3,000 tonnes H2 annually
- Status: Construction commenced
- Buyer: Uzkimyosanoat for fertilizer production
SEFE’s Infrastructure Development
SEFE, formerly Gazprom’s German subsidiary, maintains significant infrastructure plans through its subsidiary Gascade:
- Network scope: 4,100 km pipeline network conversion
- Project name: “Flow”
- Timeline: Initial sections retrofit in 2024
- Completion target: Full core hydrogen network by 2032
- Current demand: 200 TWh annual energy demand from gas customers
Market Impact and Future Implications
This partnership marks a crucial development in Europe’s energy transition strategy, particularly Germany’s efforts to secure sustainable energy sources. The agreement aligns with broader initiatives to establish robust hydrogen supply chains between renewable-rich regions and major industrial markets.
Additional Strategic Developments
ACWA Power has recently expanded its European partnerships, signing an MOU with Italian gas pipeline operator Snam. This agreement explores the development of an ammonia import terminal on Italy’s coast, enabling the conversion of Saudi-sourced ammonia into hydrogen for European distribution.
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