Egypt and Maersk's C2X have signed a new framework agreement worth up to US$3 billion for the production of green fuel and its derivatives in the Suez Canal Economic Zone.

Maersk, the Danish shipping and logistics firm, collaborated with its majority owner in September to create C2X, a new company focused on developing large-scale green methanol projects in the vicinity of the Suez Canal in Egypt, the port of Huelva in Spain, and in various other locations.

In a statement, the announcement noted that in the presence of the Egyptian Prime Minister, C2X signed a comprehensive Framework Agreement (FWA) with its Egyptian sponsors and partners to enable and accelerate large-scale production of green methanol in Egypt.

C2X is aiming to build, own, and operate assets to produce green methanol at scale with A.P. Moller Holding as majority owner and A.P. Moller - Maersk as minority owner.

The Framework Agreement is deepening the partnership and joint efforts for C2X to establish the project, which is strategically located close to the Suez Canal, in collaboration with the General Authority for Suez Canal Economic Zone (SCZone), the Egyptian New and Renewable Energy Authority (NREA), the Egyptian Electricity Transmission Company (EETC), and the Sovereign Fund of Egypt for Investment and Development (TSFE).

The efforts will include the establishment of projects for generating green energy from wind and solar sources.

”This is an important step forward for the global transition to green methanol. Egypt has many natural advantages that support a world-class green methanol project, including access to low-cost renewables and proximity to the Suez Canal and maritime customers,” said Brian Davis, chief executive officer of C2X.

”Signing of the Framework Agreement today marks another important milestone in realizing our ambition to be a leading producer of green methanol. We thank the Government of Egypt and our Egyptian Sponsors for their continued support and look forward to working with them to make our project a success we can all be proud of,” he added.

Waleid Gamal El-Dien, SCZONE's chairman, stated  that “FWA is the 10th framework agreement within Memorandums of Understanding signed by SCZONE, which aims to transform to a green economy and its various industrial applications, making use of its capabilities related to the integration of its ports with affiliated industrial zones.”

The project was initiated in March 2022 with the signing of a Memorandum of Understanding, and the FWA moved it to a deeper level of collaboration with more advanced technical and commercial feasibility studies towards the shared objective.

C2X said following the completion of these studies, the parties will proceed towards final investment agreements for the project. It aims to make a significant contribution to a fossil-free future by accelerating the availability of green methanol in large quantities.

C2X will develop, own and operate green methanol production facilities in strategic locations, which will serve to de-fossilise the chemical and shipping sectors.

The venture is majority-owned by A.P. Moller Holding, with A.P. Moller-Maersk as the minority owner.