Saudi Arabia’s energy diversification strategy gained another regional dimension this week as the Saudi Arabian Refineries Company (SARCO) signed a non-binding Memorandum of Understanding (MoU) with the UAE-based GO Energy Company to jointly assess the development of a green hydrogen and ammonia project in the Kingdom.
According to SARCO’s statement, the MoU outlines two primary objectives: a joint technical and feasibility study to evaluate the potential for large-scale green hydrogen and ammonia production, and the design of a legal framework to define cooperative mechanisms between the partners. The agreement will remain in effect for one year from the date of signing, providing a limited window for both companies to determine the project’s commercial and technical viability.
While details on project capacity, location, and technology partners have not yet been disclosed, the announcement comes amid an accelerated regional push to develop low-carbon hydrogen export corridors. Saudi Arabia’s Vision 2030 outlines a clear mandate to diversify beyond hydrocarbons, and hydrogen—particularly in the form of green ammonia—has emerged as a critical export-oriented pillar within that framework. Neighboring countries, including the UAE and Oman, are pursuing parallel strategies, leveraging abundant solar resources and established energy infrastructure to capture early market share in Europe and Asia’s emerging hydrogen import markets.
SARCO, traditionally focused on downstream refining and petrochemical investments, has increasingly turned its attention to clean energy ventures. Partnering with GO Energy—an Emirati developer active in renewable generation and hydrogen feasibility projects—signals the company’s intent to align with the region’s evolving decarbonization agenda while exploring new commercial frontiers. For both parties, the MoU represents an opportunity to consolidate technical expertise, assess project economics, and navigate the complex regulatory and financing conditions that have slowed hydrogen deployment across the Gulf.
The project’s focus on green ammonia reflects a pragmatic approach to hydrogen’s logistical challenges. Converting hydrogen to ammonia for storage and transport reduces costs and infrastructure constraints, enabling long-distance export and use in industrial applications. Yet, the commercial feasibility of such projects remains highly sensitive to renewable electricity costs, electrolyzer efficiency, and offtake agreements—factors that will likely determine the outcome of the planned study.
In the broader regional context, Saudi Arabia’s planned green hydrogen capacity already includes NEOM’s $8.4 billion project, one of the largest globally, expected to begin operations later this decade. The SARCO–GO Energy collaboration could complement these efforts by exploring smaller-scale or modular production pathways, potentially leveraging existing industrial clusters and refining assets.
The non-binding nature of the MoU underscores the early stage of the initiative, but it also illustrates how Middle Eastern energy players are shifting from broad national strategies to bilateral, project-level cooperation. As countries in the Gulf increasingly compete—and collaborate—to secure technological partnerships and financing for hydrogen infrastructure, such agreements may serve as precursors to a more integrated regional hydrogen economy.
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