Abu Dhabi National Oil Company signed an agreement with South Korea's GS Energy to explore opportunities to grow the UAE's hydrogen economy and carrier fuel export position.
GS Energy, which operates an onshore concession in Abu Dhabi, is interested in Adnoc's planned increase in the production of blue hydrogen. The clean fuel is being increasingly prioritised by Gulf oil companies as an alternative energy source. The blue variant refers to hydrogen produced when natural gas is split using steam methane reforming.
The partnership identifies "possible areas of investment in Abu Dhabi’s emerging blue hydrogen ecosystem" as well in the refining and petrochemicals hub in Ruwais, said Dr Sultan Al Jaber, UAE minister of industry and advanced technology and Adnoc Group chief executive.
The UAE, which accounts for nearly 4.2 per cent of global crude output, meets 10 per cent of South Korean oil imports. Gulf oil producers, such as the UAE and Saudi Arabia, have looked to increasingly leverage their existing fossil fuel-based relationship to trade in newer forms of energy.
On Thursday, Saudi Arabia agreed to ship natural gas to South Korea for the production of hydrogen in return for carbon dioxide. The CO2 gas will then be used in oil production facilities in Saudi Arabia.
Last year, Aramco, the world's largest exporter of crude, shipped blue hydrogen produced in the kingdom to Japan.
Aramco shipped the hydrogen in the form of the more easily transportable ammonia for use in zero-carbon power generation in Japan, one of its top importers of crude.
Dr Al Jaber also discussed new opportunities with the South Korean minister of trade, industry and energy, Yun-Mo Sung during a virtual meeting.
The two sides will explore partnerships in tackling climate change, the development of hydrogen as well as deepening industrial co-operation between Abu Dhabi and Seoul.
"As a stakeholder and a partner of the Adnoc upstream concessions, we are excited to strengthen this partnership by jointly seeking opportunities within the blue hydrogen ecosystem," said Yongsoo Huh, president and chief executive at GS Energy.
Clean hydrogen can slash greenhouse gas emissions from the hydrocarbons sector by 34 per cent, according to Bloomberg.
McKinsey estimates that the development of a hydrogen economy could generate $140bn in annual revenue by 2030 in the US alone.
Earlier this year, Adnoc, alongside Mubadala Investment Company and industrial holding firm ADQ, formed a hydrogen alliance to develop an ecosystem based on the clean fuel.
Presently, Adnoc produces 300,000 tonnes of hydrogen annually for use in its downstream operations. The company plans to expand its manufacturing capacity for the gas to more than 500,000 tonnes.
The alliance will pursue development of green hydrogen across the UAE, while Adnoc will continue to independently produce blue hydrogen using its existing infrastructure.