BAKU, Azerbaijan, August 7. Azerbaijan is poised to gain a competitive edge in the green hydrogen market, with the potential for producing green hydrogen at a lower cost than elsewhere in Europe, especially if cost-efficient transportation measures, such as re-purposed natural gas pipelines, are utilized, Trend reports.
Moreover, according to the study conducted by Advisian consulting company, the country's natural gas reserves offer a promising outlook for the blue hydrogen market. The availability of natural gas reserves in Azerbaijan could lead to lower production costs compared to equivalent production in Europe.
However, the company believes that some uncertainties need consideration. Factors such as future natural gas prices, CO2 transportation and sequestration costs, as well as storage sites, must be carefully evaluated. Additionally, the high international gas prices of 60 EUR/MWh could make using domestic natural gas for blue hydrogen economically unfavorable, as it may displace natural gas available for export. Investments will also be required to meet regulations and mitigate upstream fugitive emissions in blue hydrogen production.
A significant opportunity lies in existing ammonia and methanol plants in Azerbaijan, which can be transformed to incorporate green or blue hydrogen production. This transformation would enable the decarbonization of these existing facilities and open up new avenues for low carbon fuels. However, it is essential to assess the CO2 balance of these plants and ensure the use of biogenic feedstocks for sustainability.
As Azerbaijan already exports natural gas to Europe through the SGC natural gas pipeline system, there are substantial export opportunities for hydrogen via blending into existing pipelines. However, reaching commercial and contractual arrangements for hydrogen blending with natural gas in the SGC pipeline system is crucial. Ensuring compliance with international standards will also play a vital role in making these export opportunities a reality.
Azerbaijan's strategic positioning in the green and blue hydrogen market, combined with careful considerations of uncertainties and collaboration with international standards, places the country at the forefront of the global shift towards sustainable and economically viable hydrogen solutions.
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