Recent weeks have seen swathes of project developers and private equity firms unveil huge investment deals, worth a combined $32 billion, into the production of green hydrogen and ammonia projects in the Suez Canal Economic Zone (SCZONE). In addition to the $10 billion already promised by other companies in May, when six memoranda of understanding (MOU) have been signed, the region is fast becoming the center of Europe’s hydrogen trading with North Africa.
This time around, seven MOUs have been agreed upon, all listed at the bottom of the article, making Egypt a true hotspot for green hydrogen production. Due to the country’s abundance of land, sunny weather and high wind speeds, Egypt represents a prime location for generation of renewable energy.
This provides a very appealing prospect for the multitude of European countries looking to import renewable fuels from North Africa, with the EU looking to import 10 million tons of green hydrogen by 2030. Such imports will be crucial in replacing fossil fuels in hard to decarbonize industries such as steel and fertilizer production.
Five of the seven projects will be developed in the port of Sokhna, on the Gulf of Suez, around 50 kilometers south of the canal’s southern entry point; a well know industrial hub full of oil refineries and chemical and petrochemical sites – all potential hydrogen off-takers.
The Suez Canal provides access to numerous global markets and its independent governance over its tariffs and taxes places itself in strong market position in the ammonia export industry. It also provides an ideal location for refueling vessels since 13% of global trade is passing through the canal, boosting efforts of those looking to decarbonize the shipping industry.
Waleid Gamal El-Dein, chairman of SCZONE, argues that “the integration between the industrial zones and the affiliated ports gives SCZONE the competitive advantage that makes it one of the most important global destinations and a regional hub for the green fuel industries.”
Recent analyses suggest that hydrogen can be produced in Egypt for less than $1 per kilogram as a result of solar irradiation levels of 2,345 kWh per square meter and wind speeds of up to 12.8 meters per second to the south.
With a 100MW hydrogen plan already scheduled to begin operations in Sokhna this year, the Suez Canal is pushing Egypt forward on the road to developing substantial green hydrogen capacity. As previously reported by Rethink, US-based H2-Industries has signed a deal to provide Germany with hydrogen made in Egypt from waste.
The MOUs signed in August:
- British company, Globaleq is to establish a green fuel production plant in SCZONE on an area of 10 million meters squared with investments estimated at $11 billion and a production capacity of 2 million tons per annum;
- Alfanar, a Saudi company, has pledged $4 billion to a project that will yield around half a billion tons of green fuel per year;
- The Alcazar UAE company will invest $2 billion in an industrial complex set to produce 230,000 tons per year;
- K&K Global Company will build a plant that will generate 230,000 tons of green hydrogen per annum in Sokhna;
- “MEP” Mediterranean Energy Partners will invest $250 million in a plant that will see 120,000 tons of green ammonia be generated every year;
- The Acme Group, an Indian partner will establish a plant for green fuel production on an area of 4.5 million square meters in Sokhna, with investments of $13 billion, and the total production capacity of the project is 2.2 million tons of green hydrogen, annually;
- The Actis will establish an industrial complex for green fuel production from hydrogen and green ammonia, with $1.5 billion investments and a production capacity of 200,000 tons annually. The project will be located on an area of 2 million square meters, in the industrial zone of Sokhna.