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NEOM's Green Hydrogen Project Progresses | |
| Sumita Pawar |
NEOM Green Hydrogen Co. has announced that engineering works for its green hydrogen project have reached 60% completion, with 80% of the central procurement orders placed.
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The project, which covers an area of 352 sq km, aims to support the global industry's transition from conventional fuels to cleaner sources. The company has secured $6.1bn in non-recourse financing, with over 40% of the funding from the National Development Fund and the Saudi Industrial Development Fund.
Meeting Global Demand
The project has attracted the participation of 13 international banks in arranging funds for NEOM.
The company utilizes hydrogen-to-ammonia conversion to facilitate efficient distribution, which enables cost-effective sea transport. NEOM Green Hydrogen has established an on-site storage facility for ammonia production.
The company has secured an exclusive 30-year off-take agreement with Air Products for all the green ammonia produced at the facility.
Air Products plans to transfer these products to the United Kingdom, Germany, and the Netherlands, with an investment exceeding US$2bn.
NEOM Green Hydrogen recently achieved the financial close for the world's largest hydrogen production plant, valued at US$8.4bn. The project's funding involved signing financial agreements with 23 local, regional, and global banks and investment firms.
The NDF, in collaboration with local and international banks, played a significant role in financing Oxagon, the world's largest green hydrogen plant, contributing over SAR 10.3bn.
Wietse ter Veld, Green Hydrogen Expert at Atkins Middle East stated, “From what I can see, the United Arab Emirates (UAE) is planning to seize 25% of the worldwide hydrogen market in the near future. Natural gas derived from fossil fuels is used to manufacture about 300,000 metric tonnes of hydrogen annually. So, going forward, picture a massive increase in global hydrogen demand, perhaps as high as 600 million metric tonnes of hydrogen. With a capture rate of 25%, that would amount to 150 million metric tonnes for the UAE. That's a massive increase compared to current production levels. And all the carbon dioxide released during the hydrogen production process must be sequestered in order to make it "green" or "blue" hydrogen. As a result, the growth rate will skyrocket. And that, at least as far as anyone can tell right now, is the UAE's ultimate goal. Already, we can see that people are taking action, and plans are being put into motion.”
NEOM has entered into a partnership agreement with Air Products and ACWA Power, with a value of $5bn, to construct an environmentally friendly hydrogen facility in NEOM. The objective is to provide sustainable solutions for the global transportation sector and mitigate the impact of climate change by reducing carbon emissions.
Mohamed Jameel Al Ramahi, Chief Executive Officer, Masdar, said during the Green Hydrogen Summit 2023, “As green hydrogen continues to show growing promise as a critical enabler of our net-zero future, we must unlock its full potential by accelerating research and development and investment in this vital sector. Masdar is excited to launch the ADSW Green Hydrogen Summit to support the development of the UAE’s green hydrogen economy and help realize the global energy transition. This inaugural Summit will also pave the way toward COP28 in the UAE, where we can expect green hydrogen to be a key component of a future low-carbon energy market.”