BP has signed a memorandum of understanding with the Egyptian government with the aim of establishing a large-scale renewable hydrogen production facility in the North African country, it said in a statement Dec. 8.

BP is to evaluate the technical and commercial feasibility of developing an export hub in Egypt, exploring high-potential locations across the country for renewables.

"Egypt has world-class renewable energy resources, and we look forward to working with the government to explore how we can support its ambitious low-carbon strategy," BP executive vice president of gas and low carbon energy Anja-Isabel Dotzenrath said in the statement.

The MOU was signed by BP, Egypt's New and Renewable Energy Authority, the Egyptian Electricity Transmission Company, the General Authority for Suez Canal Economic Zone and the Sovereign Fund of Egypt for Investment and Development (TSFE).

TSFE CEO Ayman Soliman said the MOU builds on the fund's green hydrogen portfolio and its "mandate to transform Egypt into a regional hub for green energy."

Hydrogen was a prominent theme at the UN Climate Change Conference hosted by Egypt in Sharm el-Sheikh in November, with several deals and projects launched on the sidelines.

BP CEO Bernard Looney attended COP27 as a delegate of Mauritania, with which the company signed a separate MOU on green hydrogen production at the conference.

The EU signed strategic hydrogen partnerships with Kazakhstan, Namibia and Egypt, seeking a diverse range of suppliers to meet its planned 10 million mt/year of imports by 2030.

And Fertiglobe led a consortium commissioning a first phase of the 100-MW Egypt Green hydrogen plant for ammonia production, also supported by Egypt's Sovereign Fund.

BP is developing a portfolio of renewable and low-carbon hydrogen projects globally, including in the UK, Netherlands, Germany, Spain, the Middle East, the US and Australia, it said.

Europe and Asia-Pacific are seen as becoming major importers of hydrogen and its derivatives, drawing supplies from potential producing regions such as the Middle East, Australia and Latin America.

Platts, part of S&P Global Commodity Insights, assessed the cost of producing renewable hydrogen via alkaline electrolysis in Europe at Eur23.70/kg ($24.93/kg) Dec. 7 (Netherlands, including capex), based on month-ahead power prices. Production costs in the Middle East, by contrast, were assessed at $3.55/kg (Oman).

In Asia-Pacific, costs were assessed at $3.39/kg in Western Australia, well below the $9.41/kg cost in demand center Japan.