A joint venture (JV) between TotalEnergies and Eren Groupe has signed a preliminary contract with two Danish companies for a proposed renewables and green hydrogen project in Morocco to produce up to 200,000 metric tons per year of green ammonia for export to Europe, according to TotalEnergies.

The JV, named TE H2, is partnering with Copenhagen Infrastructure Partners’ (CIP’s) Energy Transition Fund and AP Moller Capital’s Emerging Markets Infrastructure Fund to launch pre-front end engineering and design (pre-FEED) studies for the proposed Chbika project near the Atlantic coast in the Guelmim-Oued Noun region, which will be powered by 1 GW of onshore wind and solar, TotalEnergies said.

“This project will constitute the first phase of a development program aimed at creating a world-scale green hydrogen production hub,” it said.

TE H2, CIP and AP Moller signed a preliminary land reservation contract with the Moroccan government for the project, the parties said.

The renewables will power green hydrogen production through electrolysis of desalinated seawater. TE H2 and CIP will oversee the development of renewable energy production. AP Moller Capital will develop the port and associated infrastructure.

The EU plans to import large volumes of renewable hydrogen and its derivatives, and nearby low-cost production sites such as Morocco are well-placed to become major suppliers.

European hydrogen production costs via alkaline electrolysis are among the highest globally, the Platts Hydrogen Price Wall shows.

Platts, part of S&P Global Commodity Insights, assessed alkaline electrolysis at an average of $6.59 per metric ton in September (the Netherlands, including capital expenditure), compared to $4.12 per metric ton in the Middle East (Qatar).

TotalEnergies holds an 80% interest in the TE H2 JV, with Eren holding the remainder.