The Thai giant PTT aims to produce green hydrogen and restart diplomatic relations with Saudi Arabia.
Thailand's state-owned oil giant, PTT Group, will invest $7 billion in green hydrogen with Saudi Arabia's leading renewable energy company, ACWA Power, while aiming for decarbonization and restarting diplomatic ties between the two countries.
The investment is part of the different approaches taken by PTT Group to find a balance between reducing emissions and maintaining profitability. The agreement would also prove to be an important step in restoring diplomatic relations between the two kingdoms, which were suspended for about 32 years until January 2022. The two companies, joined by the State Electricity Generation Authority of Thailand, signed a memorandum of understanding to start the project. The investment commitment of seven billion dollars is looming as a further step in its realization.
Auttapol Rerkpiboon, the CEO of PTT, said the project aims to build a plant in Thailand with a production capacity of 225,000 tons of hydrogen per year, the first step needed to make Thailand an international exporter as well as the main supplier in ASEAN, of green energy. The investment plan will serve to identify green hydrogen as a future energy source to create demand and fuel the increasing use of electric vehicles in the region.
Unlike "brown" and "grey" hydrogen, whose generation involves fossil fuels, green hydrogen is obtained using exclusively renewable energy sources and, consequently, generates zero emissions. Following in the footsteps of many other countries, such as Saudi Arabia, Kazakhstan, Singapore and Australia, Thailand is also investing significant economic resources in the production of green hydrogen on a gigawatt scale. PTT's net-zero strategy thus aligns with the Thai government's commitments to achieve carbon neutrality by 2050 and net-zero greenhouse gas emissions by 2065. However, using green hydrogen on an industrial scale requires two key factors - high capacity and low cost of capital - to bring prices down to a competitive level and encourage people to stop using fossil fuels. In this sense, PTT is trying to generate supply ecosystems to increase demand. Its subsidiary PTT Oil and Retail has partnered with Bangkok Industrial Gas, Toyota Daihatsu Engineering & Manufacturing and Toyota Motors, to set up hydrogen charging stations in the kingdom's Eastern Economic Corridor, a special industrial zone in Bang Lamung district, in Chonburi province. The station is expected to serve fuel cell vehicles which will be used as limousines from U-Tapao Airport to the popular tourist destinations of Pattaya, Chonburi and surrounding areas. The investment in green hydrogen production facilities will surely help in healing relations between Thailand and the Saudi kingdom decades after their ties were soured by the Blue Diamond Affair, which began with the theft of jewels from a Saudi prince's palace by by Thai gardener Kriangkrai Techamong in 1989. A theft worth $20 million, including a 50-carat blue diamond. The two countries only reached a diplomatic thaw in January 2022, when Prime Minister Prayuth Chan-ocha paid the first visit by a head of government in more than three decades. After the resumption of relations, a further sign of the thaw between the two countries came from the Saudi state oil giant Aramco, which increased the supply of crude oil, petrochemical products and liquefied natural gas to PTT Group.