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Saudi Arabia Sees Germany as Gateway for Green Hydrogen Exports to Europe

The NEOM Green Hydrogen Project. (NEOM)
The NEOM Green Hydrogen Project. (NEOM)
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Saudi Arabia Sees Germany as Gateway for Green Hydrogen Exports to Europe

The NEOM Green Hydrogen Project. (NEOM)
The NEOM Green Hydrogen Project. (NEOM)

Saudi Arabia is expanding its green hydrogen and ammonia production and export to Europe. The latest move comes after the Kingdom’s ACWA Power and Germany’s SEFE signed a deal to produce and export these products to Europe.

The agreement was signed in Riyadh, with Saudi Energy Minister Prince Abdulaziz bin Salman and German Finance Minister Jörg Kukies in attendance.

Saudi Arabia regularly signs agreements with European countries to export its clean energy products. In January, ACWA Power also signed an MoU with Italy’s Snam to explore opportunities for a green hydrogen supply chain from Saudi Arabia to Europe.

Under the new agreement, ACWA Power will be the main developer, investor and operator of green hydrogen and ammonia production, while SEFE will be a co-investor and main buyer, responsible for selling the green hydrogen to customers in Germany and Europe.

Prince Abdulaziz and Kukies discussed key energy issues and clean hydrogen efforts between the two countries, building on a 2021 agreement.

Saudi Arabia is developing the NEOM Green Hydrogen Project, which will become the world’s largest facility for producing green ammonia and hydrogen using renewable energy.

When completed in 2026, the plant will produce 600 metric tons of clean hydrogen daily through electrolysis and will generate 1.2 million metric tons of green ammonia annually.

Dr. Mohammed Al-Sabban, former senior advisor to Saudi Arabia’s oil minister, told Asharq Al-Awsat that the partnership between the Saudi and German companies shows a strong interest in green hydrogen and ammonia, clean products aimed at European markets. SEFE will buy and market these products in those countries.

He said this is an important step to add value to Saudi Arabia’s green hydrogen and ammonia production, which will be exported globally. It will also help boost the country’s non-oil economy and support its climate change goals.

Energy expert and former OPEC information director Fuad Al-Zayer noted that Saudi Arabia plans to source 50% of its energy from renewables. The Kingdom’s location and the NEOM project give it a competitive edge in green hydrogen production.

Saudi Arabia has the right conditions for producing green hydrogen at low costs and is positioned to lead globally, Al-Zayer stressed to Asharq Al-Awsat.

He added that European countries, especially Germany, are looking for alternatives to oil and gas.

Germany, with its hydrogen strategy, is seeking reliable and affordable sources.

In 2022, Germany opened a hydrogen diplomacy office in Riyadh to explore these opportunities and strengthen cooperation. Al-Zayer said Saudi Arabia aims to export all forms of energy, aligning with both countries’ goals.

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Saudi Arabia Stockpiles Surplus Oil Production to Face Global Crises

Employees at Aramco (Asharq Al-Awsat)
Employees at Aramco (Asharq Al-Awsat)
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Saudi Arabia Stockpiles Surplus Oil Production to Face Global Crises

Employees at Aramco (Asharq Al-Awsat)
Employees at Aramco (Asharq Al-Awsat)

Saudi Arabia has long followed a clear and transparent approach to preserving stability in global energy markets. Historically, it has consistently adhered to all decisions issued by the OPEC+ alliance and played a leading role alongside other producers to ensure compliance and promote the collective good.

Recently, the Kingdom briefly increased production volumes. However, the additional output was neither marketed domestically nor exported abroad. Instead, it was directed as a precautionary measure to strengthen strategic reserves, improve supply flows between the country’s eastern and western regions, and rebalance stocks held in overseas storage facilities.

Asharq Al-Awsat reached out to energy specialists to understand the significance of this move for energy security. Experts explained that building strategic reserves allows Saudi Arabia to respond swiftly to customer needs in the event of political crises, regional wars, adverse weather, or other unforeseen disruptions.

Fouad Al-Zayer, former head of data services at OPEC and an energy expert, said the Kingdom maintains millions of barrels in storage both inside and outside its borders. These reserves serve as a buffer during emergencies, enabling the country to compensate for supply shortfalls within a short timeframe. He emphasized that this stored crude is strategically critical in the face of geopolitical tensions and conflicts.

According to Al-Zayer, Saudi Arabia relies on an extraordinary reserve capacity unmatched by any other producer. The country currently produces more than 9 million barrels per day, with the capability to pump even higher volumes if needed. He noted that Saudi reserves alone account for 3 million barrels per day out of roughly 5 million barrels in global spare capacity, underscoring Riyadh’s central role in stabilizing markets and upholding its commitments under OPEC+ agreements.

He added that Saudi Arabia also hosts the International Energy Forum, which works to improve data quality and transparency in the sector. In June, the Kingdom’s output reached about 9 million barrels per day, with the modest increase attributed to logistical considerations. Al-Zayer stressed that it is common for producers to temporarily boost production to support maintenance operations or replenish storage, without impacting the broader market, since these barrels are not immediately traded.

He reiterated that Saudi Arabia has always honored OPEC+ production targets and has played a pivotal role in encouraging other members to meet their quotas.

Meanwhile, Dr. Mohammed Al-Sabban, former senior adviser to the Saudi Minister of Petroleum, explained that the Kingdom has consistently proven itself a reliable and secure supplier to global energy markets. He noted that Saudi Arabia’s recent statement clarified the reasons behind the June production uptick, emphasizing that the additional oil was neither destined for local consumption nor for export but was solely intended to refill domestic and foreign storage. He said such measures do not represent any breach of commitments, unlike the practices of some other countries.

Al-Sabban pointed out that Saudi Arabia has often gone beyond required cuts to help stabilize markets. Even the recent production increases, he said, fall within the scope of voluntary adjustments agreed upon by OPEC+ members. He noted that in July, Saudi Arabia raised production in line with credible studies indicating the market could absorb these volumes without disruption.