As the climate crisis continues, the world has been pushing for more environmentally friendly and sustainable practices. The one topic that has been of keen interest lately is green hydrogen projects. What is green hydrogen, you may ask? According to the Green Hydrogen Organisation, green hydrogen is hydrogen produced through the electrolysis of water using electricity generated from renewable energy sources, resulting in a clean, sustainable energy carrier with the potential to decarbonize various sectors. Now, the largest hydrogen project ever seen in history is being built in Saudi Arabia.
The company behind the largest hydrogen project ever
NEOM Green Hydrogen Company (NGHC) announced on May 22, 2023, that they achieved a financial close on the world’s largest green hydrogen production facility at a total investment value of USD 8.4 billion. This was made possible after signing with 23 local, regional, and international banks and investment firms. On November 15, 2024, Semafor reported that the project was already 60% complete and on track to begin production in December 2026.
The facility is located in Oxagon, in the region of NEOM, Saudi Arabia. The company’s inclusion of “NEOM” in its name gives credit to what they are pursuing, namely, a “new future.” The contractor and system integrator behind the hydrogen project is Air Products, with whom NGHC has concluded the engineering, procurement, and construction (EPC) agreement.
Air Products also signed an exclusive agreement for a 30-year off-take agreement for all the green ammonia produced at the facility. It means the economic potential of renewable energy across the entire value chain will be unlocked. The second-party opinion provider was announced as S&P Global. They play the role of certifying the non-recourse financing structure of the project. This ensures that NGHC adheres to green loan principles.
What will the project inevitably produce?
NGHC received its first industrial operating license from Saudi Arabia’s Ministry of Industry and Mineral Resources in early January 2023. This ensured that the Kingdom would surely be the world’s leading hydrogen producer while prolonging its position as a key player in the energy sector.
Thanks to the equal joint course between ACWA Power, Air Products, and NEOM, this mega hydrogen project will amalgamate up to 4GW of solar and wind energy to produce up to 600 tonnes per day of carbon-free hydrogen by the end of 2026, in the form of green-ammonia as a cost-effective solution for the transportation and industrial sectors globally.
The head and owner of the company noted that demand for NEOM’s hydrogen contribution is reportedly exceeding production capacity, driven by interest from companies like TotalEnergies and the steel and shipping sectors.
What key roleplayers are saying about the new hydrogen development
No success story is without obstacles. The mega-project near the Red Sea faced several setbacks, including the abrupt departure of its longtime CEO. However, key roleplayers remained positive.
Nadhmi Al-Nasr, Chairman of NEOM Green Hydrogen Company and Chief Executive Officer of NEOM, stated that the financial backing from the investment community indicated the unmatched potential of NGHC’s green hydrogen project.
“At scale, this project is the first-of-its-kind internationally, leading the world in the hydrogen revolution. Harnessing the energy of NEOM’s abundant natural resources, NGHC’s project will pave the way for the large-scale adoption of green hydrogen, while driving Saudi Vision 2030’s sustainable development goals.” – Al-Nasr
Seifi Ghasemi, Chairman, President, and Chief Executive Officer of Air Products, agreed that their company is proud to be part of a project shaping the future of energy, providing clean hydrogen to the world in a sustainable way.
With the end of the world’s largest hydrogen project a mere few months away, we are excited to see the positive impact of NGHC and Saudi Arabia’s green and sustainable ventures.