Consortium signs MoU for new green methanol facility in Egypt

AD Ports Group, Orascom Construction and Transmar to partner on storage, export and bunkering facility as maritime sector looks to accelerate energy transition in line with IMO 2050 decarbonisation goalsAD Ports Group, Orascom Construction and Transmar to partner on storage, export and bunkering facility as maritime sector looks to accelerate energy transition in line with IMO 2050 decarbonisation goals.

The UAE’s AD Ports Group has signed a Memorandum of Understanding (MoU) with Egypt’s Orascom Construction and shipping company Transmar covering the development of a green methanol storage, export and bunkering facility in the Suez Canal area.

The facility will supply low-carbon fuel for maritime transport and provide bunkering solutions for mainliners who have ordered green methanol powered vessels. The  partnership will also be pivotal in helping promote the use of green methanol as an alternative to fossil fuels and is aligned with AD Ports’ overall decarbonisation strategy and ongoing plans for expansion into clean energy liquid bulk storage. 

A liquid fuel produced from renewable feedstocks, including renewable hydrogen and biomethane, and without polluting emissions, green methanol is being touted as a future fuel to accelerate the energy transition in the maritime sector. Other benefits include easier, safer and cheaper storage, transportation and handling, with potential to use existing infrastructure. 

In a company statement, AD Ports noted that industry experts expect more than 100 methanol-fuelled ships to be in service from 2026, representing around one million tonnes of additional methanol demand. With the International Maritime Organization’s (IMO’s) greenhouse gas (GHG) strategy and regulations aiming to decarbonise international shipping by 2050, green hydrogen-based fuels are set to be the backbone of this shift for the maritime industry, according to the International Renewable Energy Agency (IRENA). In line with this outlook, global demand for green methanol is expected to increase to four million tonnes per annum over the next five years, based on current shipping industry orders.

Commenting on the announcement, Captain Ammar Mubarak Al Shaiba, CEO – Maritime & Shipping Cluster, AD Ports Group, said: "By signing this MoU with Orascom Construction who have vast international experience in bulk liquid terminals for methanol storage, and Transmar, who have decades of expertise in this region and within terminal operations, AD Ports Group and its subsidiaries are taking a significant step towards the sustainable future of energy. 

“This initiative not only aligns with the UAE's decarbonisation goals but also accelerates the energy transition in shipping, positioning us at the forefront of the green hydrogen revolution and enabling us to contribute to global environmental stewardship and economic diversification."

In a company statement, AD Ports also highlighted use case opportunity for green methanol as a highly efficient alternative to fossil fuels in other hard-to-abate industries, such as chemicals and plastics. 

In Q4 2023, the Egyptian government signed a framework agreement with Maersk’s  green methanol project developer C2X for a US$3 billion hydrogen-to-marine fuel plant in the Suez Canal Economic Zone.

C2X will build, own and operate the facility, in addition to upstream wind and solar farm locations that will power hydrogen production and the methanol synthesis processes. Phase one of the project, which has a tentative start-up date of 2027/8 is expected to produce up to 300,000 tonnes of green methanol annually, with potential to scale up to as much as one million tonnes per annum.
 

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