Saudi Arabia’s Ministry of Industry and Mineral Resources (MIMR) has issued the first industrial operating license for NEOM Green Hydrogen Company, which is based in Oxagon and is an equal joint venture between gigaproject developer NEOM, the local ACWA Power and US-headquartered Air Products.
The NEOM Green Hydrogen Company facility is part of Saudi Arabia’s efforts to capitalise on its low-cost hydrocarbon resources and renewable capacity.
Riyadh aims to become the world’s leading hydrogen producer whilst also maintaining its position in the global energy sector.
What are NEOM Green Hydrogen Company’s plans?
Upon completion, NEOM Green Hydrogen Company is expected to become one of the world’s largest at-scale green hydrogen production companies.
Oxagon, where NEOM Green Hydrogen Company is based, features a port and is part of a logistics network with an integrated supply chain.
NEOM Green Hydrogen Company’s plant is expected to start producing green hydrogen from 100% renewable energy sources in 2026.
READ MORE: NEOM inks deal to finance the world’s largest green hydrogen facility
A production capacity of up to 1.2 million tonnes of green ammonia annually – a figure equivalent to 600 tonnes of green hydrogen per day – is being targeted.
Saudi Arabia plans for this green ammonia to be exported to global markets to support efforts such as decarbonisation in heavy-duty transportation and reducing carbon dioxide (CO2) emissions.
As a direct impact of NEOM Green Hydrogen Company’s plant, up to 5 million tonnes of CO2 is estimated will be saved per year.
NEOM Green Hydrogen Company construction partners
When NEOM Green Hydrogen Company’s plant at Oxagon is operational in 2026, all its green hydrogen output will be made available for global export as green ammonia.
This will be achieved through an exclusive long-term off-take agreement with Air Products.
Air Products will be engineering, procurement and construction (EPC) contractor and system integrator for the multibillion-dollar plant.
In December 2022, Indian multinational conglomerate Larsen & Toubro (L&T) secured a major EPC contract from NEOM to work on the world’s largest green hydrogen project.
As part of the contract, L&T will be responsible for the execution of the power grid and power generation works. The agreement was signed as a limited notice to proceed (LNTP) agreement.
READ MORE: L&T’s scope of works under NEOM’s EPC green hydrogen contract
The facility will run on around 4 gigawatts (GW) of wind and solar energy and produce green hydrogen using 2.2GW electrolysis technology supplied by Thyssenkrupp Nucera.
Haldor Topsoe, will provide the technology to produce the green ammonia, with Baker Hughes as the selected technology partner for hydrogen compression.
Air Products will also deploy its air separation technology for the plant.
Industrialisation in Saudi Arabia
NEOM Green Hydrogen Company’s plant, Oxagon and the wider NEOM development form part of Saudi Arabia’s industrialisation plans.
MIMR and the Saudi Authority for Industrial Cities and Technology Zones (Modon) recently signed a memorandum of understanding with Oxagon to collaboratively implement the Future Factories Programme.
READ MORE: Gigaprojects transforming the kingdom’s construction landscape
The initiative is aimed at the development of a technology ecosystem for the sustainable digital transformation of the manufacturing sector in Saudi Arabia.
Plans within the Future Factories Programme include the remodelling of 4,000 existing factories.
The scheme aims to achieve the goals of the National Industrial Development and Logistics Programme (NIDLP), in line with Vision 2030.
The GCC’s hydrogen production potential
Blue hydrogen is when natural gas is split into hydrogen and CO2 either by steam methane reforming (SMR) or auto thermal reforming (ATR), according to energy company Petrofac. The captured CO2 is then stored, and the collection of greenhouse gases mitigates the environmental impact.
Green hydrogen is produced by splitting water by electrolysis, with only hydrogen and oxygen produced. The hydrogen can be used and the oxygen vented to the atmosphere with no negative impact.
Due to the GCC’s vast gas resources, experts say blue hydrogen infrastructure development could be a simple next step for oil and gas companies on the path to net zero.
The technology is produced using natural gas, with emissions controlled by carbon capture and storage.
Another type of hydrogen is ‘grey’ – SMR or ATR are used to split natural gas into hydrogen and CO2, but the CO2 is not captured and is released into the atmosphere.
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