BP signs MoU with Egypt for renewable hydrogen production

LONDON(ICIS)–Global energy company BP has signed a memorandum of understanding (MoU) with the Government of Egypt for the exploration and potential development of a renewable hydrogen production facility in the country.

The MoU was signed by BP, Egypt’s New and Renewable Energy Authority (NREA), the Egyptian Electricity Transmission Company (EETC), the General Authority for Suez Canal Economic Zone (SCZONE) and the Sovereign Fund of Egypt for Investment and Development (TSFE).

In a company press release, BP said that the company would “carry out several studies to evaluate the technical and commercial feasibility of developing a multi-phase, large-scale renewable hydrogen export hub in Egypt.”

This follows on from BP signing a similar MoU with the Government of Mauritania in November, as well as in May ADNOC joining BP’s low carbon hydrogen project H2Teesside and Masdar joining the renewable hydrogen HyGreen Teesside project, both located in northeast England.

COP27 FOLLOW-UP

Following the recent COP27 global climate summit meeting held in Egypt in November, policymakers indicated a need for accelerated efforts surrounding hydrogen following the Russian military invasion of Ukraine and Europe’s decision to move away from Russian fossil fuels by 2027.

Some European countries (Belgium, Germany, the Netherlands) have in their national hydrogen strategies an intention to import renewable hydrogen (potentially via ammonia) in conjunction with domestic production.

Several infrastructure projects are currently under construction at the ports in those countries to allow the import of renewable ammonia.

Africa is the region of the world that has the largest potential for renewable hydrogen production with potential for production costs of under $1.50/kg (€1.43/kg, £1.23/kg) according to the International Renewable Energy Agency (IRENA). Comparatively, ICIS data from 7 December shows that producing renewable hydrogen in the Netherlands using a 10-year power purchase agree (PPA) starting in 2026 for offshore wind would cost €6.62/kg (including capital cost recovery).

Further to this, several countries in Africa have signed MoUs for the potential development of renewable hydrogen supply chains with other global demand centres such as Europe and Asia.

Indeed, IRENA said that such potential in sub-Saharan Africa was over 30 times more than Europe, hence the large interest in companies and governments seeking to develop renewable hydrogen projects in Africa for export to Europe given the potential large cost savings.