AD Ports-led consortium to develop green methanol plant in Egypt

Project will include storage and export centres for the synthetic fuel

The engine room with methanol on Maersk's first container ship that sails on green methanol, in Copenhagen. EPA
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AD Ports Group, the operator of industrial cities and free zones in Abu Dhabi, is leading a consortium to develop a green methanol plant in Egypt, which is seen to help the North African country's maritime sector achieve its decarbonisation goals.

The group signed a preliminary agreement with container shipping line Transmar and Orascom Construction, both based in Egypt, for the development, which will include storage and export centres for the synthetic fuel, AD Ports Group said on Tuesday.

The value of the development and its estimated opening date were not disclosed.

The agreement underlines the “significant step” AD Ports and its subsidiaries are taking to help the energy sector move towards a more sustainable future, Ammar Al Shaiba, chief executive of the maritime and shipping cluster at AD Ports Group, said.

Green methanol is a synthetic fuel made from low-carbon sources such as biomass or through carbon capture and can be produced from green hydrogen.

The chemical compound can be used as a low-carbon liquid fuel and is considered an alternative to fossil fuels in hard-to-abate sectors where decarbonisation is a major challenge, such as chemicals and plastics.

As a fuel, green methanol is easier and cheaper to store, transport and handle, as existing infrastructure can be used.

Green methanol also has the potential to replace most petroleum-based hydrocarbons and petrochemicals, according to the International Renewable Energy Agency.

AD Ports said the new centre in Egypt will provide bunkering solutions for the mainliners that have ordered green methanol-powered vessels.

Several shipping majors, including Maersk and Hapag Lloyd, are integrating green-methanol-fuelled ships into their fleets as part of decarbonisation efforts.

Industry sources estimate that more than 100 methanol-fuelled ships will be in service from 2026, representing about a million tonnes of additional methanol demand, AD Ports said.

“This initiative … accelerates the energy transition in shipping, positioning us at the forefront of the green hydrogen revolution and enabling us to contribute to global environmental stewardship and economic diversification,” Mr Al Shaiba said.

Last month, AD Ports Group, which reported that its revenue more than doubled annually in the first quarter of this year, said that its Ports Cluster subsidiary would broaden operations to include the global distribution of marine lubricants, after an agreement with fuel retailer Adnoc Distribution.

Updated: May 28, 2024, 10:22 AM