Headlines suggest hydrogen-pioneering European energy firms such as BP, Equinor, TotalEnergies and Shell are in full-scale retreat. However, Saudi Aramco, the clear bellwether in oil, sees an opportunity to be the standout leader in producing the more challenging molecule.  The solution is always what it has been: blue, not green.

Blue hydrogen, produced by breaking down natural gas into hydrogen and carbon dioxide, fits with an oil and gas company’s core business because companies such as Aramco can capture and store the CO₂, effectively providing a low-carbon solution at costs that do not break the bank. Hydrogen can also by synthesised with nitrogen to provide blue ammonia, a cheaper and easier way of transporting the hydrogen. Contrast that with green hydrogen, using electrolysis, and the cost, infrastructure and scalability is onerous.

Aramco has stated it is about building the architecture of energy control—molecules, carbon flows and infrastructure—optimised for a constrained world where carbon is priced, traced and traded. This is an energy company that is future proofing its business and sees the relentless shift to a lower-carbon world no matter how important oil is now and how important oil could still be in many decades ahead.

That contrasts with some of the energy majors, which may also still be invested in some blue hydrogen and CCS projects but are running scared of owning the narrative.

“Blue hydrogen is the input. Blue ammonia is the carrier. Green hydrogen is the aspiration” Fahad, Aramco

In March 2025, Aramco acquired 50% of Blue Hydrogen Industrial Gases Company (BHIG) in Jubail Industrial City—the core of Saudi Arabia’s industrial heartland. This secured a strategic foothold in the Eastern Province’s carbon economy.

“Blue hydrogen is the input. Blue ammonia is the carrier. Green hydrogen is the aspiration,”  wrote Turki Fahad, head of exploration planning and performance management at Aramco.

This is a company that is not drinking the green renewables Kool-Aid but rather taking a pragmatic approach to decarbonising its oil business. “Aramco starts with blue—because it scales today—and builds a system that can pivot to green tomorrow,” Fahad added.

Blue hydrogen works because it can be rolled out more widely using the country’s gas reserves and CCS infrastructure and can evolve to green hydrogen if and when the industry makes technological and cost breakthroughs without playing catch-up with regards to building out the entire supply chain. It is maybe also why the European IOCs have not completely abandoned the space.

Jafurah, the Middle East’s largest shale gas field, holds around 200tcf of wet gas. It will supply the core feedstock for Aramco’s blue hydrogen as output increases. The gas will flow into Aramco’s expanding Master Gas System, which is being extended by 4,000km of new pipelines to increase its capacity by 3.2bcf/d.

The gas lands in Jubail, where BHIG converts it into hydrogen. The resulting carbon dioxide is captured at the Jubail CCS Hub—a joint venture with services company SLB and chemicals firm Linde that will sequester 9mt/yr of CO₂ by 2027, one of the largest industrial CCS operations globally.

“Jubail processes and captures. Jafurah feeds. Together, they form Aramco’s industrial-carbon backbone,” Fahad noted.

Forget the hype, this is what a long-term plan looks like based around business needs and low-carbon dedication. There is no PR spin or strategic flip-flopping, but rather a real, pipeline-enabled, CCS-integrated, molecule-to-market hydrogen business. IOCs should take note.

“What Aramco is building is not just a hydrogen corridor. It is a platform where gas enables scale, carbon becomes currency, and green hydrogen does not disrupt the system. It upgrades it,” Fahad added.

Tick, tock

But the challenge is real. Costs remain prohibitive, buyers reluctant to commit and energy demand keeps on growing at an incredible pace. And while sustaining its model by supplying the Kingdom’s industrial core has bought the company breathing room, at some point there needs to a greater global shift. The IOCs, with investors breathing down their necks, were not afforded the same patience. Saudi Arabia has time on its side, but how much is the big question.

Indeed, Aramco formally cut its blue ammonia production target from 11mt/yr to 2.5mt/yr by 2030, citing high production costs and the absence of bankable offtake agreements. CEO Amin Nasser stressed the project could not proceed at its original scale or timeline without long-term contracts and a clear market signal.

The production timeline was also delayed from 2027 to 2030, a sign that domestic utilisation was the priority and ensuring economic viability, and hoping for export once demand and pricing mature. Whether this is a positional masterstroke or a hopeful gambit, only time will tell. But nobody can doubt Aramco as a low-carbon pioneer, unwavering in its commitment to blue hydrogen even if the headlines still read as if it is a pure oil company or that blue hydrogen is the justification for oil and gas companies to pump at will.  This is not pure green idealism nor is it blue-washing cynicism, but a pragmatic, strategic and considered approach to the energy transition. IOCs should watch and learn.

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Author: Paul Hickin, <BR>Editor-in-chief