Saudi SARCO Partners with Chinese Ally Hydrogen Energy for Green Ammonia Plant in Jazan

Saudi Arabian Refineries Company SARCO has signed a memorandum of understanding with Chinese firm Ally Hydrogen Energy Co Ltd to establish a major green ammonia production facility in Jazan Industrial City. The agreement effective May 15 2026 marks a significant step in Saudi Arabia’s clean energy expansion and strengthening of Sino-Saudi cooperation in sustainable technology.

Under the non-binding MoU the two companies will collaborate on developing a comprehensive green energy ecosystem in the strategically located Jazan Industrial City. The partnership encompasses three key components including a green ammonia production plant a local manufacturing and assembly hub for hydrogen production and purification equipment and a research and development center established in collaboration with Saudi universities.

The project leverages Jazan’s strategic coastal location and existing industrial infrastructure to support both domestic demand and future export markets. The facility will position Saudi Arabia to capitalize on growing global demand for clean hydrogen derivatives while creating local supply chains for advanced hydrogen technologies.

SARCO part of the ETHRAA Group with revenues exceeding 1 billion USD last year brings substantial financial backing to the venture. The company expects the transaction to positively impact its financial statements by the third quarter of 2028. The memorandum remains valid for one year unless extended by mutual agreement between the parties.

The Chinese partner Ally Hydrogen Energy Co Ltd will contribute specialized expertise in hydrogen production and purification technologies. The collaboration includes plans to localize advanced technology and establish a comprehensive supply chain for Saudi Arabia’s emerging hydrogen sector.

This agreement represents SARCO’s selection of the final supplier for its proposed green ammonia plant building on earlier strategic partnerships. The company previously signed MOUs with UAE-based Go Energy Company in October 2025 and through its subsidiary Clean Energy Company with UK-based AGR Renewable Energy in February 2026.

The Jazan project aligns with Saudi Arabia’s Vision 2030 diversification strategy and the Kingdom’s ambitions to become a major global clean energy player. Saudi Arabia targets becoming the world’s largest hydrogen producer with clean hydrogen production goals of 2.9 million tons annually by 2030 and 4 million tons by 2035.

The partnership also includes establishing a research and development center focused on advancing green hydrogen and ammonia technologies while developing local expertise through collaboration with Saudi universities. This initiative aims to create a knowledge base for future innovation in the rapidly evolving clean energy sector.

Green ammonia serves as an efficient carrier for hydrogen transportation avoiding the technical challenges and costs associated with hydrogen compression or liquefaction. The facility will support global decarbonization efforts particularly in hard-to-abate sectors including shipping steel manufacturing and fertilizer production.

The agreement demonstrates increasing international cooperation in renewable energy development and highlights the growing strategic partnership between Saudi Arabia and Chinese technology companies in the clean energy transition. The project positions both nations to benefit from the expanding global hydrogen economy while advancing their respective carbon neutrality objectives.