NEOM signs agreements to build world's largest hydrogen plant
NEOM, Saudi Arabia's green megacity, located in the Tabuk Province, has reached a historic milestone with the signing of agreements valued at $8.4 billion that will see the construction of the world's largest carbon-free hydrogen plant by NEOM Green Hydrogen Company (NGHC). This flagship project marks a major step towards the introduction of green energy within the region.
NGHC has announced the signing of significant financial documents with 23 local and international banks and investment companies, which will help consolidate the world's largest hydrogen production plant, with the securing of an exclusive 30-year contract for all the green ammonia to be produced.
The NEOM power plant will carry out electrolysis processes for the production of green ammonia that will be obtained with energy from renewable sources. This investment is a major step in the fight against climate change and, therefore, the transition to the production of clean fuels and the reduction of dependence on fossil fuels.
The signing of the agreement takes place through a consortium with the largest international clean energy production and development companies, ACWA Power, Air Products, and NEOM, which will implement the construction of solar and wind infrastructures to feed with 4GW the production of up to 600 tons per day of carbon-free hydrogen.
The international company S&P Global, which is dedicated to providing ratings, standards and data analysis of global markets, will carry out the certification of the green lending principles, as an external opinion provider to the entity.
David R. Edmondson, CEO of NGHC, says it will be a historic moment for the large-scale production of green hydrogen and is grateful for the participation and support of the shareholders and investment community who have made it possible for this project to lead the change in the transition to a carbon-free world.
Nadhmi Al-Nasr, Chairman of NEOM Green Hydrogen Company and CEO of NEOM, during the Future Minerals Forum 2022, stated that the green hydrogen facility will be operational by 2025. During the signing of the agreement he stated that this project "will lay the foundation for the large-scale adoption of green hydrogen, while advancing the sustainable development goals of Saudi Vision 2030".
According to the Millennium Alliance for Humanity and the Biosphere (MAHB), oil reserves will be depleted by 2052, and natural gas by 2060. This fact has led to the Saudi government's decision to invest more in and focus on the production and use of renewable energy with projects such as Saudi Vision 2030, which aims to achieve a 50% renewable energy use rate.
The project will not only benefit NEOM and Saudi Arabia, but will also have a significant global impact with research into new hydrogen production processes that will serve as a substitute for fossil fuels. In addition, the remaining hydrogen produced can be exported to other countries, promoting international trade in clean energy.
