According to Nikkei Asia article published on November 9, 2022, Saudi Aramco is working to secure deals to supply "blue hydrogen" to customers in Japan and South Korea amid rising demand for low-carbon energy sources, the head of the oil giant said on Wednesday.
The company is "finding good customers" though the negotiations remain confidential, President and CEO Amin H. Nasser said. The potential customers are "working with their respective governments for the incentive from their end to secure these offtake agreements," he added.
Nasser did not name any of the potential customers or give a time frame for the negotiations.
Saudi Aramco aims to produce hydrogen from gas, capturing and storing the carbon dioxide produced in the process. Hydrogen produced in this way is called "blue hydrogen." It is low in carbon emissions but less environmentally friendly than green hydrogen, which is extracted from water in a process powered by renewable energy.
Nasser also said Saudi Aramco will work to shrink the carbon footprint of its mainstay operations. "We are further reducing the carbon intensity of our oil production by at least 15% by 2035 against our 2018 baseline," he said.
Saudi Aramco will continue to invest in conventional energy sources like oil and gas, he added. The company will increase its oil output to 13 million barrels per day by 2027, an increase of 1 million barrels per day from current levels. Gas production will increase by more than 50% by 2030, he added.
Nasser also challenged the notion that the Ukraine war caused the recent energy crunch and price rises. "The foundation for this crisis was laid many years ago when investment in oil and gas were cut sharply because of pressure from different directions," he said. "There was overconfidence that alternative energy can replace or displace hydrocarbons immediately."
He added: "Our transition plans had no backup plan. Basically there was no plan B."
