The Neom green hydrogen project in Saudi Arabia is moving ahead with a $900mn engineering, procurement and construction (EPC) contract award to industrial gases firm Air Products.

Saudi utility Acwa Power (33.3pc), Air Products (33.3pc) and state economic zone developer Neom company (33.34pc) each own a share of the Neom project—the largest planned green hydrogen project in the world, which is due for commissioning in 2026.

The limited notice to proceed (LNTP) contract was announced in a filing to the Saudi stock exchange.

“If financial close is never achieved and project is abandoned, a maximum aggregate exposure can reach up to $300mn to Acwa… under the LNTP in relation to the EPC contract for the Neom green hydrogen project,” says the filing.

Air Products and its subsidiaries will carry out the EPC work both in Saudi Arabia and on overseas value chains.

Planned city

The $5bn green hydrogen-to-ammonia complex will be situated in Neom, a city planned on the Red Sea coast in the northwest of Saudi Arabia.

The facility will use over 4GW of renewable energy—2GW of wind and 2GW of solar—to produce hydrogen that will be converted into ammonia. Solar power may be produced at around the recent record-low Saudi tender of $0.0104 kW/h.

Germany’s Thyssenkrupp Uhde Chlorine Engineers will supply a 2GW electrolyser to the project, which will produce 1.2mn t/yr of green ammonia.

Air Products will be the exclusive offtaker of the green ammonia and will be responsible for distributing it to global markets. The firm says it will likely re-convert much of the ammonia into green hydrogen for use in trucks and buses.

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Author: Tom Young