Future hydrogen development in Central Asia will depend on political ambition to decarbonise and could face offtake and export hurdles, warns Yury Melnikov, independent analyst and member of the UN Economic Commission for Europe’s task force on hydrogen, drawing on the results of an open study due to be published in Geneva in the coming weeks. While the region is emerging as a new source of oil and pipeline gas to Europe in the wake of the Russia-Ukraine war, unlocking vast hydrogen potential is lagging some way behind.

Uzbekistan and Kazakhstan present the most likely centres of Central Asian hydrogen production, owing to an abundance of energy resources—natural gas, wind and solar—and political will to progress development as a route for decarbonisation, Melnikov says. Both countries could each produce more than 2mn t/yr of low-carbon hydrogen by 2040 in a high-case scenario.

13.6tn m³ – Estimated Turkmen natural gas reserves

Saudi government-affiliated developer Acwa Power recently signed a heads of terms agreement with Uzbekistan’s energy ministry and state-owned chemical company Uzkimyosanoat to develop green hydrogen-to-ammonia projects in the country. The first project will be a 3,000t/yr integrated green hydrogen facility connected to an existing ammonia plant in Chirchiq, to be brought online by the end of 2024.

The Kazakh government anticipates hydrogen will play a role in decarbonising its transport and industry, according to a net-zero strategy document published in February. The strategy also notes that the country faces a high risk of stranded assets as global economies transition away from fossil fuels. While hydrogen is not specified as a potential route to decarbonise exports, the strategy notes that it will have to seek new growth drivers via sustainable economic development.

The country also signed a strategic partnership agreement with the EU at Cop27 last year to explore supply of critical minerals, batteries and renewable hydrogen.

The Kazakh government has signed a land availability and infrastructure access agreement with Hyrasia One—a subsidiary of renewables developer Svevind—to develop a 20GW green hydrogen project on the coast of the Caspian Sea, aiming to serve demand centres in both Europe and Asia. Melnikov is sceptical that such export-focused projects will be able to secure offtake, owing to the lack of midstream infrastructure to transport the low-carbon gas to the EU and uncertainty around the scale of domestic hydrogen demand. “The developers will need to spend more time and effort to structure their projects in a different way toward minimising the hydrogen demand risks,” he says.

Kazakhstan has no gas pipelines to Europe; the subsea Trans-Caspian Gas Pipeline, which would connect the country and Turkmenistan with Europe via Azerbaijan—bypassing Russia and Iran—has been on the table for decades with little traction.

Pipelines in place

Azerbaijan and Turkmenistan already export gas from their abundant reserves via pipeline to Europe for the former and China for the latter.

Turkmenistan could theoretically lead Central Asia in hydrogen production owing to its large natural gas reserves—estimated at 13.6tn m³ by BP. The country would be able to produce nearly 6mn t/yr of low-carbon hydrogen by 2040 in a high-case scenario with substantial development of CCS, according to Melnikov.

But Turkmenistan is unlikely to realise its potential owing to a lack of political will to decarbonise. The country last year submitted its updated Nationally Determined Contributions to the UN pledging a 20pc reduction in emissions from 2010 levels by 2030, but it has not set a net-zero target. And as China has not committed to importing hydrogen—instead focusing on building out domestic capacity—Turkmenistan’s natural gas exports could be “sustained for decades”, Melnikov tells Hydrogen Economist.

However, Azerbaijan has seen interest from Saudi, Emirati and Australian developers in large-scale green hydrogen production, although no firm investments have been made. While this could represent a freeing up of natural gas for export to Europe in the short term, Melnikov anticipates Azerbaijan may investigate blue hydrogen production as the EU seeks to decarbonise its gas grid in the long term.

Russian pivot

Only two years ago, Russia had started to position itself as a hydrogen exporter to continue supplying a decarbonisation-focused Europe, targeting up to 50mn t/yr of exports by 2050. Germany’s Uniper had even agreed in late 2021 on initial terms for a 1.2mn t/yr ammonia import contract with Russian independent gas producer Novatek.

But with the introduction of European sanctions and corporate exits from Russia since March last year, all Russian hydrogen production projects have been shelved. The country has now pivoted toward developing and exporting hydrogen-related technologies to ‘friendly’ nations, Melnikov tells Hydrogen Economist.

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Author: Polly Martin