A group of Egyptian companies and China’s UEG have signed a preliminary agreement to explore developing a Mediterranean green hydrogen hub in the port city of Alexandria.

The memorandum of understanding was signed by:

• Abu Qir Fertilisers & Chemicals Company (Egypt)
• AlexFert (Egypt)
• Orascom Construction (Egypt)
• UEG Green Hydrogen Development Holding (China)

In a joint statement, the companies said: “The collaboration marks a significant step toward advancing Egypt’s position as a regional leader in green hydrogen and sustainable energy solutions.

“The proposed project aims to develop a large-scale green hydrogen production facility powered by renewable energy, with integration into existing ammonia production infrastructure.”

Under the terms of the deal, UEG and Orascom Construction will lead feasibility studies for 500MW of renewable energy generation and 480 tonnes a day (t/d) of green hydrogen production. Abu Qir and AlexFert will evaluate the integration of green hydrogen into ammonia production processes and support access to local resources and infrastructure. The renewable energy will be a mix of wind and solar, according to the statement.

Hany Dahy, the chairman of Abu Qir Fertilisers & Chemicals Company, said: “This partnership reflects Abu Qir’s commitment to leading the transition toward low-carbon ammonia production, leveraging our existing assets while integrating green hydrogen solutions.”

Joe Williams, the chief executive of the Green Hydrogen Organisation, said: “The announcement of this project comes at a crucial time, as geopolitical tensions in the Middle East highlight the importance of diversifying energy and fuel supply chains.“

Developing integrated green ammonia and fertiliser production in Alexandria supports local industrial value, and strengthens long-term energy and food security.

“As green ammonia production scales in Egypt, it can also be used as a clean shipping fuel given Egypt’s strategic maritime location.”

The preliminary agreement establishes a framework for cooperation while the parties conduct technical, commercial and regulatory assessments.

Subject to the outcomes, the partners intend to negotiate definitive agreements for the project’s development, according to their statement.

Abu Qir Fertilisers established North Abu Qir for Agricultural Nutrients in May 2023 to develop a major Egyptian fertiliser project designed to produce 2,400 t/d of ammonium nitrate.

Located next to Abu Qir Fertilisers in Alexandria, on a site formerly occupied by the Rakta paper manufacturing facility, the project is a joint venture with a capital investment of £E10bn ($190m), of which Abu Qir Fertilisers holds a 45% stake.

The state-owned companies Egyptian General Petroleum Corporation and Egyptian Petrochemicals Holding Company hold stakes of 45% and 10%, respectively.The project focuses on the production of ammonia and nitric acid.