Saudi Arabia

Competitive corporate tax rates Customs duties exemptions

100% foreign ownership

Flexibility in employing foreign labour Low-cost loans

EICDataStream ranks Saudi Arabia second in the GCC in terms of CAPEX for ongoing and planned clean energy projects, with seven developments worth US$20.2bn currently being tracked. In October 2021, Saudi Arabia announced plans to become the largest producer of low-carbon hydrogen by targeting the production of around 4mtpa of hydrogen by 2030. It also aims to capture carbon of

Saudi Arabia is keen to attract hydrogen and carbon capture projects

October 2022, setting a production target of 1–1.25mtpa by 2030. By 2040 it hopes to be producing up to 3.25–3.75mtpa, rising to 8.5mtpa by 2050. Oman estimates it will require investment of US$140bn by 2050 to reach the hydrogen production goal. It also set up a state-owned company, Hydrogen Oman, to oversee growth of a green hydrogen-based economy.

Why invest?

Oman has a vibrant economy and an open attitude toward

44mtpa by 2035, to achieve net zero emissions by 2060.

Projects to note include the US$8.4bn NEOM green hydrogen plant, to be powered by 4GW of solar and wind energy, and expected to produce 600–650 tonnes of green hydrogen per day. The project secured a financial close with a value of US$8.4bn in May 2023. Also, the US$4.5bn Jubail industrial city carbon capture and storage hub, expected to come online by 2027 – the first phase of the hub will be able to store and utilise 9mtpa of CO2

Who are the key players?

Saudi Arabia is keen to attract hydrogen and carbon capture projects and has partnered with international investors including ADNOC, Brooge Renewable Energy and Masdar. Contractors ThyssenKrupp, ACWA Power, Larsen & Toubro and Baker Hughes have all been successful in winning contracts during the last year.

Saudi Arabia’s competitive edge

A study conducted by the King Abdullah Petroleum Studies and Research Centre states that the price of green hydrogen in Saudi Arabia could be one of the lowest in the world. While the global hydrogen price range is US$2–7 per kg, according to the research, Saudi Arabia will be able to reach US$1 per kg in the long term due to the country’s low natural gas and renewable energy prices.

Why invest?

Saudi Arabia is developing policies and regulatory instruments to drive technologies in hydrogen development to commercial readiness. The list of incentives released to date covers a wide range of financial and non-financial incentives. These include, but are not limited to, tax incentives, government subsidies, relaxed Saudisation requirements and discounts on government fees. Funding initiatives include the Saudi Industrial Development Fund, the National Infrastructure Fund and the National Development Fund.

Major Projects To Watch

Saudi Arabia

Green Hydrogen

Production Facility

– NEOM and ACWA

Power

Value: US$8.4bn

Start up: 2026

Stage: Engineering, procurement and construction (EPC)

Status: Contract awarded

Operators: NEOM, ACWA Power, Air Products & Chemicals

Jubail Industrial City Carbon Capture & Storage Hub

Value: US$4.5bn

Start up: 2027

Stage: Feasibility study

Status: Memorandum of Understanding (MoU)

Operators: Saudi Aramco, Linde, Schlumberger

Green Hydrogen – PIF, Samsung C&T & POSCO

Value: US$6.5bn

Startup: 2029

Stage: Feasibility study

Status: MoU

Operators: Samsung C&T, Posco, Korean Southern

Oman

Green Energy Oman

Value: US$10bn

Start up: 2028

Stage: Feasibility study

Status: Contract awarded

Operators: Intercontinental Energy, OQ, EnerTech, Shell

Duqm Green Ammonia & Hydrogen Project – Acme

Value: US$3.5bn

Start up: 2025

Stage: EPC

Status: Contract awarded

Operators: Tatweer Petroleum, ACME Solar

SalalaH2 Green Hydrogen & Ammonia Project

Value: US$1bn

Start up: 2028 foreign investment. The government is making the country more attractive to foreign investors by improving infrastructure and creating new laws that will simplify investment procedures, reduce bureaucratic hurdles and provide various tax exemptions and incentives.

The establishment of a US$5.2bn investment fund, called the Oman Future Fund, is set to be a catalyst for foreign direct investment and will be under the management of the Oman Investment Authority.

Stage: Feasibility study

Status: Planning

Operators: OQ, Marubeni Corporation, Linde Group, Dutco

SOURCE OF PROJECT INFORMATION: EICDATASTREAM