Engie and Saudi Arabia's PIF have signed an agreement to develop a hydrogen energy project in Saudi Arabia

Italy's Engie and Saudi Arabia's sovereign wealth fund, the Public Investment Fund, have signed a preliminary agreement to jointly develop green hydrogen projects in the Arab world's largest economy. Engie said the two sides will also explore opportunities to accelerate the kingdom's energy transition in line with the goals of Saudi Arabia's Vision 2030 initiative. The transaction enables PIF and Engie to assess the feasibility of joint development opportunities. The energy company said the two sides will also work together to develop a strategy to best access international markets and secure offtake arrangements.

Frederic Claux, managing director of Amea Flexible Power Generation and Retail at Engie. "Our collaboration with the PIF will help lay a strong foundation for the green hydrogen industry and make Saudi Arabia one of the world's largest exporters of green hydrogen." The preliminary agreement, signed by Mr. Clox and Yazeed Al Humied, PIF Deputy Governor and Head of Investment for the Middle East and North Africa, is in line with the country's efforts to diversify its economy under Riyadh's Vision 2030 transformation agenda.

Saudi Arabia, Opec's largest oil producer, like its hydrocarbon-rich counterparts in the six-nation Gulf Cooperation Council economic bloc, is seeking to strengthen its global competitiveness in the production and supply of hydrogen and its derivatives. The UAE has taken a major step towards decarbonising its economy with the update of the UAE Energy Strategy 2050 and the launch of the National Hydrogen Strategy.

The UAE aims to turn the country into a leading and reliable low hydrocarbon producer and supplier by 2031, Energy and Infrastructure Minister Suhail Al Mazrouei said at the launch.

The UAE plans to produce 1.4 million tons of hydrogen per year by 2031, increasing production to 15 million tons by 2050. By 2031, it will have built two hydrogen oases, each producing clean electricity. Mr Al Mazrouei said the UAE would increase the number of oases to five by 2050.

In June, Oman's Hydrom signed a $10 billion deal to develop two new green hydrogen projects with the Posco-Engie consortium and the Hyport Duqm consortium. The contracts are expected to generate a total production capacity of 250 kilotons per year, with more than 6.5 gigawatts of installed renewable energy capacity at these sites. As economies and industries transition to a low-carbon world, hydrogen can be produced from renewable energy and natural gas and is expected to become a key fuel. It comes in many forms, including blue, green and grey. Blue and gray hydrogen are produced from natural gas, while green hydrogen splits water molecules by electrolysis. French investment bank Natixis estimates that hydrogen investment will exceed $300 billion by 2030.