(Bloomberg) -- Saudi Aramco is moving closer to building a giant carbon capture and storage project at its main refining and chemicals hub at Jubail, on the kingdom’s Gulf coast.
The oil producer signed a shareholders’ agreement with partners Linde Plc and SLB to develop the facility, which aims to capture and store 9 million tons of carbon dioxide a year by the end of 2027, according to a statement. Aramco will hold a 60% stake, with the partners owning 20% each of the project.
Saudi Arabia is looking to prepare its industries and economy for the energy transition by working to limit emissions and implement lower-carbon projects at its chemical plants and refineries. The country is the world’s largest crude exporter and de facto leader of producers’ group the Organization of Petroleum Exporting Countries.
The Jubail CCS project will be key to Aramco’s plans to use a large amount of the natural gas from its giant Jafurah development to produce blue hydrogen and ammonia. Those fuels, which can be exported and used for heat or power, depend on converting natural gas to hydrogen and sequestering the carbon emissions to meet environmental standards.
“CCS plays a critical role in furthering our sustainability ambitions and our new energies business,” Ashraf Al Ghazzawi, Aramco’s executive vice president for strategy and corporate development, said in the statement. The company’s transition plans focus on “reducing emissions from conventional energy sources and enabling new, lower-carbon energy solutions.”
Aramco will initially capture carbon emissions from three natural gas plants and other industrial sources and store these at the Jubail facility. The company plans to eventually expand its CCS capacity further. Aramco is also planning a global gas trading business and could decide to export the fuel from domestic plants if its hydrogen plans don’t take off, company officials have said.
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