Saudi giant says allocated feedstock gas may be used for LNG instead.
Saudi Aramco, the world’s largest oil producer, has said its hydrogen plans are under threat after failing to secure the long-term contracts across the globe that it needs to underpin the billions of dollars of planned investments.
Aramco in June 2023 unveiled its plan to produce up to 11 million tonnes per annum of blue ammonia, the source of the hydrogen, as early as 2030.
Output from Saudi Arabia’s largest sour gas unconventional field, Jafurah, which holds an estimated total resource of 229 trillion cubic feet of gas, was to be used as feedstock for the blue ammonia.
However, in May this year, Aramco chief executive Amin Nasser acknowledged the difficulty in engaging customers in Europe, Japan and South Korea to agree contracts because of the anticipated high cost of blue hydrogen.
Aramco estimated that the hydrogen production would cost the equivalent of about $250 per barrel of oil to buyers.