Saudi Arabia to become a global leader in hydrogen

 

Saudi Arabia to make a profound impact on global hydrogen production 

As the climate crisis intensifies, the world is increasingly focusing on environmentally sustainable practices. One of the key solutions gaining attention is green hydrogen. But what exactly is green hydrogen? According to the Green Hydrogen Organisation, it’s hydrogen produced via water electrolysis using renewable energy. This method generates a clean, sustainable energy carrier capable of decarbonizing various industries.

Currently, the largest hydrogen project ever is underway in Saudi Arabia, setting a new benchmark in the energy sector.

The Company Behind the Largest Hydrogen Project

On May 22, 2023, NEOM Green Hydrogen Company (NGHC) revealed they had reached a financial milestone, securing funding for the world’s largest green hydrogen production facility with a total investment of $8.4 billion. This achievement was made possible through partnerships with 23 local, regional, and international financial institutions. By November 15, 2024, Semafor reported the project was 60% complete, with production set to begin in December 2026.

Located in Oxagon within Saudi Arabia’s NEOM region, the facility's ambitious design aligns with NEOM’s vision of creating a “new future.” The project’s contractor, Air Products, holds the engineering, procurement, and construction (EPC) agreement for the venture.

 

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Air Products has also secured an exclusive 30-year off-take agreement for all the green ammonia produced at the site. This will help unlock the full economic potential of renewable energy across the entire value chain. To ensure compliance with green loan principles, S&P Global was appointed as the second-party opinion provider, certifying the project’s financing structure.

What Will This Mega-Project Produce?

In January 2023, NGHC received its first industrial operating license from Saudi Arabia’s Ministry of Industry and Mineral Resources, solidifying the Kingdom’s position as a leader in hydrogen production. Thanks to a collaboration between ACWA Power, Air Products, and NEOM, this groundbreaking project will harness 4GW of solar and wind energy to produce up to 600 tons of carbon-free hydrogen per day by the end of 2026. The hydrogen will be converted into green ammonia, providing a cost-effective solution for the global transportation and industrial sectors.

The project’s potential is already in high demand, with major players like TotalEnergies, along with the steel and shipping sectors, expressing interest in securing a share of NEOM’s hydrogen output.

Insights from Key Stakeholders

No monumental success is without its challenges. The project near the Red Sea faced a few setbacks, including the unexpected departure of its CEO. However, key figures in the initiative remain optimistic about the future.

 

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Nadhmi Al-Nasr, Chairman of NGHC and CEO of NEOM, emphasized that the financial backing from global investors underscores the unparalleled potential of the project. He stated, “At scale, this project is the first-of-its-kind internationally, leading the world in the hydrogen revolution. By harnessing NEOM’s abundant natural resources, NGHC will pave the way for the widespread adoption of green hydrogen, aligning with Saudi Arabia’s Vision 2030 sustainable development goals.”

Seifi Ghasemi, Chairman, President, and CEO of Air Products, echoed this sentiment, expressing pride in being part of such a transformative project, one that will deliver clean hydrogen to the world sustainably.

As the world’s largest hydrogen project nears completion in just a few months, the future of NGHC and Saudi Arabia’s green energy initiatives is poised to make a profound global impact.

Source: https://www.ecoportal.net/