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Tuesday, 20 September 2022

“Trick or treat,” says Europe to MENA

Germany is coming to MENA in full force to lock in energy supplies — and some of it will be green: German Chancellor Olaf Scholz is due to visit the UAE, Saudi Arabia and Qatar on a two-day trip starting on Saturday, with energy cooperation “high on his agenda,” Bloomberg notes a German government spokesman saying at a Berlin press conference yesterday. Scholz’s visit would be the latest move in a full court press by Europe to convince MENA countries to increasing energy exports to Europe. The continent is looking to cushion fallout from the Russia-Ukraine war. The conflict drove up energy prices, a development exacerbated by a forthcoming ban on Russian oil that will take supplies off the table heading into winter — and by Russia’s shutdown of a key natural gas pipeline to the continent.

The main purpose of the visit is to boost LNG exports, but green hydrogen is also a priority for Germany. Plans are underway for the UAE to start exporting green hydrogen to Germany, with a “first test delivery” arriving in Hamburg last week, Germany’s economy ministry said on Thursday. “The pilot delivery lays an important foundation for medium-term imports of hydrogen, which will then also be green,” the ministry was reported as saying. In addition to green hydrogen, Adnoc had also sent an initial pilot shipment of blue ammonia to Hamburg from a new low-carbon ammonia plant that will produce 1 mn tons per year, as we noted earlier this month.

SMART POLICY- This is a once-in-a-generation opportunity to become part of Europe’s energy mix — and we need to push for long-term contracts. Scholz’s trip follows a similar visit by European Council President Charles Michel, who was in Saudi Arabia last week to drum up energy imports, including some from green hydrogen. Saudi officials pushed for the signing of long-term contracts for renewable energy investments, including for green hydrogen exports, as we noted yesterday.

ON THE FLIPSIDE-

Greece is courting Mideast investment in the green economy: UAE Economy Minister Abdulla bin Touq Al Marri reiterated his country’s interest in investing in Greece, saying the Emirates are looking at renewable energy, infrastructure, agriculture through a joint EUR 4 bn investment fund. Al Marri’s statements to the press came during the Thessaloniki International Fair (TIF) which wrapped up on Sunday, the Athens-Macedonian News Agency (ANA) reports.

…Ditto, India: Indian Commerce Minister Piyush Goyal was in KSA this week to drum up investment in green hydrogen and other initiatives, according to a ministry statement. Saudi Crown Prince Mohammad bin Salman had pledged USD 100 bn in investments in India.

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