Saudi Aramco, the world’s largest oil company, finalized the acquisition of a 50% equity interest in Blue Hydrogen Industrial Gases Company (BHIG) effective March 24, 2025. The step is among the milestones toward Saudi Arabia’s ambitions to be a global leader in the hydrogen economy in line with the Kingdom’s Vision 2030 aspirations to accelerate the diversification of the nation’s energy mix and lower carbon emissions. BHIG, that was the fully-owned subsidiary of Air Products Qudra (APQ), a joint venture by Air Products of U.S. and Qudra Energy of Saudi Arabia, will be a 50-50 joint venture of Aramco with APQ.
A Strategic Partnership for a Hydrogen Future
The acquisition, initially announced with binding agreements in July 2024, signals Aramco’s push to increase its presence in the emerging hydrogen industry, especially in blue hydrogen production. Blue hydrogen is produced from natural gas by steam methane reforming, and carbon dioxide emissions are captured and stored through carbon capture and storage (CCS) technology, rendering it a lower-carbon form of energy than conventional fossil fuel-based energy. BHIG’s operations, which are situated in Jubail Industrial City in the Eastern Province of Saudi Arabia, are poised to leverage Aramco’s growing CCS capabilities to produce and supply hydrogen at scale.
The agreement is a key component of Aramco’s strategy to establish a high-purity hydrogen network in the Eastern Province, one of the foremost industrial centers. The company aims to supply both local and regional customers, such as refining, chemical, and petrochemical industries, as well as positioning to supply new emerging global markets for low-carbon energy solutions. The agreement also involves the offtake of hydrogen and nitrogen by Aramco from BHIG, integrating the resource further into its operations ecosystem.
Leadership Perspectives
Ashraf Al Ghazzawi, Aramco Executive Vice President of Strategy & Corporate Development, highlighted the potential of this investment to drive transformation. “Aramco’s investment in BHIG has the potential to aid in developing a hydrogen network in the Kingdom’s Eastern Province,” he commented. “This network, together with our CCS hub in Jubail, enables us to seize opportunities to minimize carbon emissions, drive growth, and diversify the energy mix.” Aramco’s signature Jubail CCS hub will capture and store CO2 emissions, and BHIG commercial operations are aligned with it.
Air Products Qudra Chairman Ahmed Hababou also concurred, mentioning the joint venture’s part in driving industrial decarbonization. “This joint venture is a further reflection of actions being undertaken by Aramco and Air Products Qudra to help establish a strong hydrogen network in the Eastern Province for the benefit of key industries,” he continued. Mohammad Abunayyan, APQ Vice-Chairman, said, “We are proud of this strategic partnership with Aramco, aimed at developing lower-carbon intensity energy solutions under Vision 2030.”
Saudi Arabia’s Hydrogen Ambitions
Saudi Arabia wants to be a world leader in hydrogen, and blue and green hydrogen projects are being invested in heavily. These range from the Kingdom’s $8.4 billion NEOM Green Hydrogen Company project, a joint venture between Air Products, ACWA Power, and NEOM, where carbon-neutral green hydrogen is to be generated from renewable energy. The BHIG acquisition aligns with these efforts by expanding blue hydrogen production, which takes advantage of the nation’s wealth in natural gas resources while reducing emissions via CCS.
The completion of this deal signals the accelerated pace of Aramco’s execution of its hydrogen strategy. With the combination of its technical strength with Air Products’ industrial gas leadership, Aramco is positioning BHIG as a cornerstone of potentially the Middle East’s largest hydrogen network.
Implications for the Energy Transition
The Aramco-APQ partnership is timely as the world’s appetite for cleaner energy intensifies. Blue hydrogen can’t match green hydrogen in emissions neutrality, but it offers a pragmatic stepping stone for countries like Saudi Arabia that can use existing infrastructure and resources to scale up production in a matter of months. BHIG’s goal of delivering less-carbon-emitting hydrogen to Jubail’s industrial zone can be replicated to decarbonize heavy industry, an industry notoriously difficult to abate.
But there are challenges on the horizon. Blue hydrogen critics cite fossil fuel consumption and the energy penalty of CCS in questioning its longer-term sustainability compared to green hydrogen. Whether Aramco is successful in this enterprise will ultimately depend on how efficient and scalable its CCS activities are, and how it will fare in competition with an international competitive market in which both cost and green credentials come under the microscope.
Looking Ahead
With this acquisition, Aramco is not just diversifying its energy mix but also turning Saudi Arabia into a global energy transition player. The acquisition of Air Products Qudra cements BHIG’s status as the frontrunner in the Kingdom’s hydrogen plans, with spillover benefits for the region and the globe. As business activity expands in tandem with Aramco’s CCS operations, the world will be watching with bated breath to witness whether this collaboration will prove to be fruitful in achieving its potential for sustainable growth and industrial decarbonization.
For the time being, finalization of this acquisition of the 50% interest is a breakthrough move one that can begin establishing the foundations for a thriving, lower-carbon hydrogen economy in Saudi Arabia and reinforce its role as a leader in energy in a progressively dynamic world.
