Magnesium hydroxide desulfurization technology goes overseas: Business opportunities for associated sulfur treatment in Middle East oil and gas fields

1. Sulfur treatment dilemma and demand explosion in Middle East oil and gas fields

As the core production area of global oil and gas resources, the treatment of associated sulfur has always been a key pain point in the industry chain. The sulfur content of natural gas fields in the United Arab Emirates, Saudi Arabia and other countries is generally as high as 5%-15%. Although the traditional Claus Process can recover sulfur, it faces three major challenges: insufficient hydrogen sulfide conversion efficiency (the conversion rate of some projects is only 90%-95%), severe equipment corrosion (high-temperature acidic gas accelerates pipeline loss), and sulfur market volatility risks (international sulfur prices will fluctuate by ±30% in 2025). The case of Abu Dhabi National Oil Company (ADNOC) shows that the sulfur inventory cost of one of its offshore gas fields has increased by 18% annually due to the sluggish sales of sulfur, forcing the demand for technical alternatives.

Magnesium hydroxide desulfurization technology, with its dual characteristics of "efficient desulfurization-resource conversion", is becoming a new choice to solve the sulfur dilemma in the Middle East. Through the slurry spraying system, magnesium hydroxide can convert hydrogen sulfide into high-purity magnesium sulfate, which can be directly used in the preparation of oilfield fracturing fluid or agricultural fertilizer production, realizing the transition of sulfur resources from "pollutants" to "commodities". Data from a pilot gas field in Kuwait showed that after desulfurization with magnesium hydroxide, the hydrogen sulfide removal rate was stabilized at 99.2%, and the annual income of magnesium sulfate byproducts covered 75% of the operating costs of the desulfurization system.

2. Technology Adaptation and Localization Transformation Path

1. Reconstruction of the Raw Material Supply System

The Middle East lacks natural magnesite resources, but the maturity of seawater magnesium extraction technology has made it possible to localize the production of magnesium hydroxide. The Suhar Industrial Port in Oman has built a seawater magnesium plant with a daily output of 500 tons of magnesium hydroxide. Through the "nanofiltration membrane separation-hydrothermal synthesis" process, the magnesium ion concentration in seawater is purified from 1,300ppm to 98.5%, and the production cost is reduced by 40% compared with imported magnesite. Saudi Aramco is working with BASF of Germany to develop a "photovoltaic-driven seawater magnesium extraction" system, with the goal of reducing unit energy consumption to below 2.8kWh/kg.

2. Adaptation to high-temperature and high-salt environments

For the Middle East desert climate (average daily temperature exceeds 45°C, and the salt content in the air reaches 2.3mg/m³), three core modifications are required to the desulfurization system:

Anti-crystallization nozzle design: titanium alloy material and self-cleaning flow channel are used to prevent magnesium sulfate crystallization and blockage;

Intelligent concentration control: based on the DCS system to monitor the slurry pH value in real time and dynamically adjust the amount of magnesium hydroxide added;

Corrosion-resistant material upgrade: The inner wall of the absorption tower is coated with a silicon carbide-epoxy resin composite coating, and the service life is extended to more than 10 years. After the transformation of the Ras Al Khaimah gas field in the United Arab Emirates, the system's unplanned shutdown rate has dropped from 12 times/year to 1 time/year.

3. Construction of by-product value chain

The application scenarios of magnesium sulfate in the Middle East are rapidly expanding:

Increasing oil and gas production: As a viscosifier for fracturing fluid, it can increase shale oil recovery by 15%-20%;

Desert agriculture: Combined with drip irrigation system, it is used to improve salinized soil. Abu Dhabi farm test showed that wheat yield increased by 32%;

Building materials production: ｒｅｐｌａｃｅ gypsum to prepare fireproof board. A building materials company in Dubai developed A1-level fireproof material using magnesium sulfate and has passed EN 1364 certification.

III. Innovation of business cooperation model

1. Bundled sales of technical services

Chinese EPC companies can launch the "desulfurization system + magnesium sulfate underwriting" model:

Provide desulfurization equipment construction for Middle Eastern owners and collect engineering fees;

Sign a 5-10 year exclusive purchase agreement for magnesium sulfate and enjoy sales share. In the cooperation case of a Shandong environmental protection company and Qatargas, this model increased the project IRR (internal rate of return) from 9% to 18%7.

2. Carbon asset linkage development

The carbon emission reduction generated by magnesium hydroxide desulfurization can be converted into CCER indicators:

For every ton of hydrogen sulfide processed, the system can reduce 4.2 tons of CO₂ equivalent emissions;

Through Dubai Carbon Exchange (DGCX) transactions, a gas field that processes 500,000 tons of hydrogen sulfide annually can obtain carbon sink income of more than 20 million US dollars. Oman's Duqm Special Economic Zone has piloted the "carbon tariff deduction" mechanism, and desulfurization projects using Chinese technology certification can enjoy import tariff reductions of 10%.

3. Financial instrument empowerment

Green Islamic bonds (Sukuk): Sharia-compliant financing tools, Kuwait National Bank has issued a special bond of US$200 million for magnesium hydroxide desulfurization projects;

Supply chain financing: The blockchain-based magnesium sulfate trade data chain realizes real-time discounting of accounts receivable and improves capital turnover efficiency by 60%.

IV. Competitive barriers and breakthrough strategies

1. International standard certification

Middle East owners generally require technology to comply with API and ISO dual certification:

API 932B: Corrosion-resistant material testing standard, requiring 3,000 hours of salt spray test data;

ISO 14046: Water footprint certification, requiring water consumption per ton of magnesium sulfate production to be ≤1.8m³. A Jiangsu company was the first to obtain ESG investment access in the UAE by introducing a seawater cooling closed-loop circulation system.

2. Geopolitical risk hedging

Localized equity cooperation: Establish a joint venture in Saudi Arabia's NEOM new city, with a local shareholding ratio of ≥30%;

Insurance coverage: Insure China Export Credit Insurance (Sinosure), covering special risks such as war and exchange restrictions.

V. Future Trends: From Sulfur Treatment to Hydrogen Energy Synergy

With the advancement of hydrogen energy strategies in Middle Eastern countries (such as Saudi Arabia's "2030 Green Hydrogen Energy Plan"), magnesium hydroxide desulfurization technology can form a closed loop with green hydrogen production:

Green electricity hydrogen production: high-purity hydrogen can be extracted by electrolysis of byproduct magnesium sulfate, and the feasibility of this path has been verified by the Masdar Institute in Abu Dhabi;

CCUS integration: CO₂ captured by the desulfurization system is used for enhanced geothermal power generation (EGS), and a project in Oman has achieved "desulfurization-hydrogen production-carbon utilization" trigeneration.

The sulfur treatment dilemma of oil and gas fields in the Middle East is catalyzing the globalization of magnesium hydroxide technology. When the desulfurization tower in Abu Dhabi is connected to the hydrogen energy pipeline network of NEOM New City, and when the magnesium sulfate in Qatar nourishes the desert granary, this technological revolution that began with environmental governance has evolved into an industrial opportunity to reconstruct the energy value chain. For Chinese environmental protection companies, only by deepening technology iteration and building ecological symbiosis can they write the next chapter of green going overseas on the Persian Gulf.