When the word "energy" comes up, oil is usually the first thing that comes to mind. But the concept of energy today is much broader: it includes electricity, renewable energy, hydrogen and smart grids, and even extends to artificial intelligence and cybersecurity. Against this backdrop, Saudi Arabia has taken steps with its neighbors and fellow Arab nations, signing three new memorandums of understanding, each with its own focus.
What happened?
Minister of Energy Prince Abdulaziz bin Salman signed three memorandums of understanding with ministers from Kuwait, Qatar and Egypt, aimed at expanding cooperation between Saudi Arabia and these countries across various energy sectors.
Before getting into the details, what exactly is a "memorandum of understanding"? Simply put, it is an initial agreement that sets out the overall framework and identifies the areas in which the two parties will cooperate. Detailed projects and contracts follow later. In other words, it is the first step that opens the door to cooperation.
With Kuwait: electricity and grid interconnection
The first memorandum was signed with Kuwait's Minister of Electricity, Water and Renewable Energy, Dr. Subaih Al-Mukhaizeem. Its main focus is electricity.
It covers cooperation on electricity and renewable energy, interconnecting the two countries' power grids, electricity exports, energy efficiency and storage, and smart grids. It also extends to areas such as digital transformation, innovation, cybersecurity and artificial intelligence.
What does grid interconnection mean? It means that the two countries' electricity grids are connected, so if one comes under pressure during peak periods—as can happen on the hottest days of summer—the other can supply it with electricity. This is not a new idea in the region: the Gulf Cooperation Council countries have had a shared electricity grid for years, and the memorandum opens the door to broader cooperation between the two countries in this area. Smart grids, meanwhile, use technology to distribute electricity more efficiently and detect faults quickly.
In addition, the two countries will work to develop strategic partnerships between their institutions, localize energy-related materials, products and services—in other words, manufacture and provide them locally rather than import them—and strengthen cooperation among companies operating in these sectors.
The memorandum also provides for cooperation on technologies and solutions to mitigate climate change, including "circular carbon economy" solutions. This is a concept embraced by Saudi Arabia that treats carbon like any other resource: by reducing its emissions, reusing it, recycling it and removing it.
With Qatar: from oil to hydrogen
The second memorandum was signed with Qatar's Minister of State for Energy Affairs, Saad bin Sherida Al Kaabi. It covers a wide range of areas: oil and petroleum products, gas and its derivatives, refining, petrochemicals, electricity, clean hydrogen and its derivatives, renewable energy, and energy efficiency and storage.
Hydrogen deserves special attention. It is a fuel whose use does not produce carbon dioxide; its main byproduct is water vapor. It is described as "clean" because it is produced using low-emission methods. Many countries see it as one of the most important fuels of the future.
The two countries will explore opportunities for joint projects, including pipelines to transport and export oil and gas, the development of sustainable petrochemical materials for use in construction and other sectors, and cooperation on infrastructure that supports access to energy.
Notably, the memorandum also covers cooperation in negotiations, forums and international organizations concerned with energy transitions and climate change, such as the United Nations Framework Convention on Climate Change, the Paris Agreement, and the Intergovernmental Negotiating Committee tasked with developing a legally binding international instrument on plastic pollution.
Why does this matter? Plastic is made from petrochemicals, and any international restrictions on it affect an important industry in both countries. Coordinating their positions in these negotiations could give them greater influence.
With Egypt: oil, gas and fuel stations
The third memorandum was signed with Egypt's Minister of Petroleum and Mineral Resources, Karim Badawi. It focuses on oil, gas and their derivatives.
It covers cooperation on crude oil, petroleum products and natural gas—including their trade, handling, transport, storage and distribution—as well as the development of related infrastructure and logistics services.
One of the memorandum's most notable features is that it brings Saudi expertise directly to Egypt. This includes Saudi Arabia's experience in upgrading, operating and maintaining fuel stations and service centers, as well as its experience opening the liquefied petroleum gas sector to competition. This is the gas used in household cooking cylinders.
The memorandum also expands cooperation in petrochemicals and investment in existing and planned projects.
Why do these memorandums matter?
The memorandum with Egypt explicitly sets out the goals of cooperation: integrating energy markets, making supply chains more resilient and reliable, strengthening energy security, and helping meet demand in local, regional and global markets.
Looking at the three memorandums, it is clear that each was tailored to the nature of the partner country. With Kuwait, the focus is on electricity and grid interconnection, given that it is a neighboring country and exchanging electricity between adjacent countries is easier and more beneficial. With Qatar, the focus is on gas, hydrogen and international coordination, as Qatar is one of the world's largest producers and exporters of liquefied natural gas. With Egypt, the emphasis is on oil and gas trade and sharing expertise. Egypt is a vast market with a population of more than 100 million, and its location between the Red Sea and the Mediterranean makes it an important hub for energy transport and trade.
More broadly, diversifying partnerships in this way helps strengthen energy security across the region and creates new opportunities for Saudi companies, products and expertise.
How will these memorandums be put into practice?
Memorandums of understanding are a starting point. Typically, institutions and companies in each country then begin turning this framework into actual projects and contracts, with clear figures and timelines.
The memorandum with Egypt, for example, stipulates that all activities must be carried out in accordance with the laws and regulations of both countries and on a commercial basis that serves their mutual interests. In other words, it is a commercial partnership that benefits both parties.
Energy is no longer just a barrel!
Energy is no longer just a barrel of oil. Saudi Arabia is building a diverse network of partnerships around it: electricity and grid interconnection with Kuwait, gas, hydrogen and international coordination with Qatar, and oil, gas and expertise-sharing with Egypt. The aim is a region with stronger energy security, broader markets and greater coordination on the issues that will shape the future of the entire energy industry.
Disclaimer:
This article is intended to explain and simplify the news in clear, accessible language. The information it contains is drawn from published news sources and has been adapted and simplified; it does not represent the official position or statements of any organization. This information may be updated after publication, so readers are advised to consult official sources for full details.