Saudi Arabia and Japan to co-operate on crude exports and clean hydrogen

The kingdom will ensure the security of supplies to the Asian country, Energy Minister Prince Abdulaziz bin Salman says

Saudi Arabia's Minister of Energy Prince Abdulaziz bin Salman. Reuters

Saudi Arabia, the world’s largest oil exporter, will continue its co-operation with Japan in areas such as crude exports and clean hydrogen, the kingdom’s energy minister has said.

Prince Abdulaziz bin Salman said that Saudi Arabia, which is responsible for 40 per cent of Japan’s oil imports, will ensure the security of supplies to the energy-starved Asian country, the official Saudi Press Agency reported on Sunday.

The minister also emphasised the need for joint co-operation between the two countries in the field of clean hydrogen and its applications, in addition to developing the infrastructure for “circular carbon economy” applications.

Last month, Japan, the world's fourth-biggest importer of crude, and Opec agreed to establish a dialogue between senior officials to address Tokyo's energy security concerns.

Japan is looking to bolster its energy security by entering into long-term liquefied natural gas agreements and adding more renewable resources to its overall energy mix.

Global competition for LNG cargo is set to intensify this year as China’s economy recovers and Europe stockpiles more natural gas before the next winter.

In December, Inpex, Japan’s largest oil and gas exploration company, signed an agreement with US-based Venture Global LNG for the supply of a million tonnes annually for the next 20 years.

Last year, Saudi Arabia and Japan signed new agreements focused on the circular carbon economy and carbon recycling fields and covering other areas such as green hydrogen, fuel ammonia and derivatives.

Prince Abdulaziz said Saudi Arabia’s purchases from Japan in the energy sector amounted to nearly 12 billion Saudi riyals ($3.2 billion) in the past five years.

“There are many opportunities for co-operation between the two countries in the fields of petrochemicals,” the energy minister said.

In April, a shipment of independently certified low-carbon ammonia from Saudi Arabia arrived in Japan for use in power generation.

The ammonia was produced by Sabic Agri-Nutrients with feedstock from top crude exporter Saudi Aramco.

The shipment represented a “milestone” in the development of clean energy solutions, and was the result of “effective co-operation” between several entities in Saudi Arabia and Japan, Prince Abdulaziz said.

Ammonia, a compound of nitrogen and hydrogen, can be used as a low-carbon fuel across industrial applications, including transport, power generation, and industries such as steel, cement and fertiliser production.

Power plants could potentially use 100 million tonnes of low-carbon ammonia as feedstock by 2050, according to Wood Mackenzie.

Aramco aims to produce up to 11 million tonnes of blue ammonia per year by 2030 and is currently developing carbon capture and hydrogen capabilities.