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Platts launches Middle East hydrogen prices as mega-projects underline region's ambitions


Qatar lowest-cost producer at $2.63/kg

Well below demand centers in Europe, Asia

Region plans 3 million mt/year H2 in 2030s

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S&P Global Platts has launched new low-carbon hydrogen assessments in the Middle East as the region strives to become a major exporter of the energy carrier.

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Initial prices showed the Middle East amongst the cheapest producers of renewable hydrogen in the world, second only to Australia in markets assessed by Platts.

The assessments track three production pathways in Oman, Saudi Arabia, Qatar and the UAE.

The lowest price on Nov. 22 was $2.63/kg, for alkaline electrolysis in Qatar.

This compared with $13.51/kg and $9.50/kg in potential demand centers in Europe (Netherlands) and Japan, respectively, on Nov. 19.

The daily Middle East production values account for local feedstock costs, including electricity and natural gas, and fixed costs for either proton exchange membrane (PEM) electrolysis, alkaline electrolysis or steam methane reforming with carbon capture and sequestration pathways.

"The launch of hydrogen assessments in the Middle East reflects the importance of the region as a potential key hub for the production of hydrogen and its derivates such as ammonia as part of the energy transition," Platts Hydrogen & Ammonia Pricing Specialist Anton Ferkov said.

Middle East hydrogen prices (incl capex) Nov. 22

Price ($/kg)
Hydrogen Oman SMR with CCS
Hydrogen Oman PEM Electrolysis
Hydrogen Oman Alkaline Electrolysis
Hydrogen Qatar SMR with CCS
Hydrogen Qatar PEM Electrolysis
Hydrogen Qatar Alkaline Electrolysis
Hydrogen Saudi Arabia SMR with CCS
Hydrogen Saudi Arabia PEM Electrolysis
Hydrogen Saudi Arabia Alkaline Electrolysis

Source: S&P Global Platts

Export potential

Rich in solar, wind and natural gas, the Middle East could become a key global supplier of clean hydrogen and ammonia.

Announced projects in Saudi Arabia, the UAE and Oman are set to produce 3 million mt/year of hydrogen in the 2030s, according to S&P Global Platts Analytics, with Oman's 14-GW Al Wusta and Saudi's 4-GW NEOM projects among the world's most ambitious to date.

And the UAE made a bold statement at the UN Climate Change Conference in Glasgow earlier in November, targeting a 25% share of the global clean hydrogen market by 2030.

The potential prize is selling into anticipated large demand centers in Europe via the Suez Canal or premium Asian markets such as Japan and South Korea.

Germany is keenly eyeing imports to meet its clean hydrogen consumption targets, signing preliminary agreements with Saudi Arabia, Australia, Canada and Chile.

The head of Germany's H2Global Task Force Timo Bollerhey told Platts in June the initiative expects physical delivery of a first cargo of hydrogen or a derivative into Germany by the end of 2024.

Daily price inputs

Electricity costs in the assessments are based on daily power prices in each country based on market research. The Middle East natural gas prices for steam methane reforming with CCS are based on Platts' LNG FOB Middle East prices, less a gasification cost based on market research.

The launch of calculated production costs in the Middle East adds to Platts hydrogen and ammonia assessments in the region.

Platts launched an FOB Middle East ammonia assessment Oct. 12, and will launch market-based carbon-neutral hydrogen prices for the Middle East and five other key hydrogen hubs on Dec. 9.