Energy & Infrastructure Insight - Issue 3

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A question often asked about the development of the green hydrogen export industry is: who will be the first to market? The NEOM Company/Air Products/ACWA Power project illustrates part of the answer to this question. Renewable power developers and existing hydrogen market players will form joint ventures in parts of the world where renewable electricity resources are abundant and the regulatory and economic environment is facilitative. We expect traditional energy players also to get involved quickly, to carve out a place in the burgeoning green hydrogen market. National and international oil companies, on both the supply and demand sides of the market, would be natural investors and developers, both because of their deep knowledge of crude hydrocarbon and LNG markets—which may be templates for parts of the green hydrogen supply chain—and because of their existing infrastructure and supply chains. These historical advantages will reduce the barriers to market for them compared with niche players. Many National Oil Companies (NOCs) and International Oil Companies (IOCs) already have well-advanced hydrogen strategies in place, and those that do not would be well advised to develop a plan for their role in this industry going forward. Disclaimer: This article first appeared in Project Finance International under the original title 'Shipping the Sunshine'. 15 A Head Start FOR MORE INFORMATION PLEASE CONTACT: Omar Alkaffas Associate Abu Dhabi T +971 2 410 8163 omar.alkaffas@ Dan Feldman Partner Abu Dhabi T +971 2 410 8158 dan.feldman@ CONCLUSION Green hydrogen is a serious contender to be one of the replacements for hydrocarbons as the world moves towards sustainable industry, and has the benefit of leveraging existing hydrocarbon infrastructure as it grows. With governments increasingly promoting green hydrogen and ammonia, we see the industry as replacing petrochemicals and LNG in the megaproject cycle of the 2020s. Early investors from both the supply and demand side of the market can gain an upper hand in the early stages of this exciting new industry.

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