Saudi Aramco has finalized its acquisition of a 50% stake in Blue Hydrogen Industrial Gases Company (BHIG), cementing a joint venture with Air Products Qudra—an entity formed between U.S.-based Air Products and Saudi Qudra Energy. This move places Aramco at the center of Saudi Arabia’s blue hydrogen ambitions, leveraging its existing carbon capture and storage (CCS) infrastructure to establish itself as a leader in the emerging low-carbon hydrogen economy.
The transaction, first announced in July 2024, underscores Aramco’s strategy of integrating blue hydrogen production into its broader energy transition plans. BHIG’s focus on producing hydrogen from natural gas with CCS aligns with Saudi Arabia’s industrial energy demands, particularly in Jubail Industrial City, a key hub for refining, petrochemical, and chemical industries. Given the proximity of Aramco’s Wasit natural gas processing facility, the venture benefits from an established supply chain, reducing the need for extensive new infrastructure.
Aramco’s Executive Vice President of Strategy & Corporate Development, Ashraf Al Ghazzawi, highlighted the significance of the deal: “Aramco’s investment in BHIG is expected to contribute to the development of a hydrogen network in the Kingdom of Saudi Arabia’s Eastern Province. This network, along with our CCS hub in Jubail, can help us capitalize on emerging opportunities both domestically and globally to reduce carbon emissions, support growth, and diversify our energy portfolio.”
Air Products Qudra executives echoed similar sentiments, emphasizing the role of the joint venture in expanding Saudi Arabia’s hydrogen infrastructure. “This partnership represents another step towards developing a robust hydrogen network to serve the refining, chemical, and petrochemical industries,” said Air Products Qudra Chairman Ahmed Hababou. Meanwhile, Vice-Chairman Mohammad Abunayyan framed the initiative within Saudi Arabia’s Vision 2030 framework, which seeks to diversify the Kingdom’s energy mix and reduce reliance on crude oil exports.
Yet, the finalized deal notably lacks any confirmed hydrogen or nitrogen offtake agreements—an omission that raises questions about the commercialization timeline for BHIG’s output. When first announced, Aramco’s potential offtake rights were expected to provide a guaranteed revenue stream, but the absence of such details in the final agreement suggests that monetization strategies remain unresolved. This uncertainty introduces a potential risk factor, particularly given the evolving regulatory landscape and global hydrogen pricing volatility.
Despite this, Aramco’s move into blue hydrogen follows a calculated approach. While green hydrogen has dominated the discourse on clean energy transitions, blue hydrogen offers a pragmatic near-term alternative, leveraging Saudi Arabia’s vast natural gas reserves and existing CCS capabilities. This approach allows Aramco to maintain its core hydrocarbon business while adapting to shifting energy demands.
Air Products’ continued 50% stake in BHIG ensures that the venture benefits from its experience in large-scale gas infrastructure and hydrogen technologies. This partnership extends beyond BHIG, as Air Products has previously collaborated with Aramco on various industrial gas supply projects across Saudi Arabia.
