Construction of Neom green hydrogen plant progresses - report

The construction of the USD-8.4-billion (EUR 7.85bn) Neom green hydrogen plant in northwestern Saudi Arabia is progressing significantly, the chief executive of NEOM Green Hydrogen Company, Wesam Al-Ghamdi, has said.

Construction work is moving forward according to the scheduled timeline, Al-Ghamdi said in an interview with Al-Sharq Al-Awsat.

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Al-Ghamdi noted that the company has received the first batch of essential equipment, with current work underway to install it on-site. The delivery of more wind turbines and key equipment for the hydrogen plant and the wind and solar parks is expected during the current year.

The chief executive expects the highest level of progress in construction activities to be achieved this year and full operations to commence in 2026.

The companies behind the large project, Riyadh-based ACWA Power, NEOM, and Air Products, achieved financial close in May 2023 at USD 8.4 billion after securing USD 6.1 billion in non-recourse financing from banks.

In the interview, Al-Ghamdi explained that the "financing confirms the confidence of international investors in the economic feasibility of the project, aimed at establishing the world's largest hydrogen production plant."

Fuelled by a combination of solar and wind energy totalling up to 4 GW, the facility aims to produce some 600 metric tonnes of renewable hydrogen daily by the end of 2026. Air Products has secured the exclusive rights as the sole purchaser of the ammonia generated at the facility through a 30-year supply contract.

Al-Ghamdi expressed confidence in producing green hydrogen on a large scale and at the lowest possible cost in the market starting in 2026. The plan aligns with Saudi Arabia's aspirations to become a leading country globally in hydrogen production and export, targeting the production of 4 million tons of clean hydrogen annually by 2030.