Saudi Arabia Refineries Company (SARCO) has signed an agreement with China-based Ally Hydrogen Energy Company to set up a green ammonia production plant in Jazan.
The move aligns with Saudi Arabia’s green ambitions, aimed at diversifying economic revenues away from oil and establishing the Kingdom’s position as a global leader in clean energy production, in line with the objectives of Vision 2030.
Green Ammonia Facility
SARCO announced on Sunday it has signed a non-binding memorandum of understanding (MoU) with China’s Ally Hydrogen Energy to build a green ammonia production plant in Jazan Industrial City, the company said in a statement to Tadawul.
Under the agreement, the two companies will also establish a local assembly and manufacturing hub for hydrogen production and purification equipment in Jazan Industrial City.
The MoU also outlines plans for launching a research and development center alongside Saudi universities to foster innovation in green hydrogen and ammonia technologies.
Positive Impact
SARCO said that the MoU will take effect from the signing date. “This memorandum shall become effective from the date of its signing by the parties and shall remain valid for a period of one calendar year, unless the Parties agree otherwise in writing,” it noted in the statement.
Moreover, it expected the agreement to reflect positively on SARCO’s financial statements by the end of the third quarter of 2028, according to the statement.
SARCO’s Green Investments
Driven by a commitment to sustainable growth, SARCO has been actively expanding its footprint in the renewable energy sector through strategic regional and international partnerships.
In February, the company’s wholly owned subsidiary, Clean Energy Co., entered into a non-binding MoU with AGR, a UK-based renewable energy firm.
Effective February 5, this six-month agreement outlines the potential offtake of output from a proposed green ammonia plant within the Kingdom, with the possibility of extension by mutual written consent.
This initiative builds on earlier momentum. SARCO had previously secured a one-year MoU in October 2025 with UAE-based Go Energy. That agreement focuses on the joint development of a green hydrogen and ammonia project in Saudi Arabia and likewise remains valid for a year unless mutually extended.
Green Ammonia
Green ammonia, NH3, is a compound consisting of nitrogen and green hydrogen derived from water and renewable energy sources, such as wind or solar energy. The production process generates zero carbon dioxide emissions. Therefore, it has no environmental impact.
This has made green ammonia an attractive alternative to conventional fossil fuels. Because it is a liquid, green ammonia is much easier and cheaper to store and ship around the world than pure hydrogen gas. This makes it an incredibly useful tool for the future, serving not only as a sustainable fertilizer but also as a clean fuel for large cargo ships and a way to store renewable energy until it is needed.
Saudi Arabia’s Energy Transition
Under Vision 2030, Saudi Arabia has made major strides toward transitioning to clean energy, targeting 130GW of renewable power capacity by 2030.
The Kingdom’s innovative city, NEOM, is poised to host the world’s largest green ammonia plant, with the NEOM Green Hydrogen Company set to become fully operational by the end of 2026.
The facility will produce up to 600 tons of carbon-free hydrogen per day in the form of green ammonia, significantly contributing to reducing global carbon emissions.
Furthermore, Saudi Arabia and Germany have boosted cooperation in clean energy production by signing an MoU in February 2025 to launch the Saudi-German Green Hydrogen Bridge.
The agreement between Saudi ACWA Power and German SEFE aims to produce and export green hydrogen and green ammonia from Saudi Arabia to Europe, with an initial target of exporting 200,000 tons of green hydrogen annually by 2030.
