Neom Green Hydrogen mulls next phase
23 November 2023
Neom Green Hydrogen Company (NGHC) received the first set of wind turbines for one of the two renewable energy plants that will power its integrated green hydrogen and ammonia production facility in early October.
The initial panels for the project’s solar power plant and hydrogen storage tanks are expected to arrive soon. The first air separation units, meanwhile, will be delivered in the first quarter of 2024.
“We are on track to meet our 2026 target commercial operation date, with the first ammonia production expected sometime between mid to late summer of 2026,” David Edmondson, CEO of NGHC (pictured), tells MEED.
Announced in the summer of 2020, the region’s first, and probably the world’s largest, green hydrogen and ammonia production facility reached financial close in May this year. The project required a final investment of $8.4bn.
“The decision to develop the project was made in 2019 in the strong belief that there would be a market for green hydrogen,” explains Edmondson.
“Having Air Products was certainly a major factor in that decision because of their hydrogen knowledge and experience. They already have an existing infrastructure for the production and distribution of hydrogen, including for mobility.”
The US-headquartered industrial gases firm, Saudi utility developer and investor Acwa Power and Public Investment Fund-backed Neom equally own NGHC.
The scale of the integrated project is unprecedented. It will require over 4GW of wind and solar power and 400MW of battery energy storage systems. A 190-kilometre electricity transmission grid will link these to a 2GW electrolysis plant in Neom’s Oxagon industrial city.
The plant will produce up to 600 tonnes of hydrogen daily, which will be converted into roughly 1.2 million tonnes of ammonia a year. Air Products will ship the ammonia to Europe to be cracked back to hydrogen for mobility applications.
Despite some pushback on the business model's efficiency and the feasibility of green hydrogen applications in transport and mobility, Edmondson assures MEED that years of due diligence and compliance with EU carbon intensity policies support the business case. Twenty-three banks are financing the project, he points out.
“The NGHC plant is designed to ensure that the carbon intensity of the end product will be beneath the required threshold in Europe,” he says.
Edmondson acknowledges the premium costs currently involved in a low-carbon-intensity supply chain. However, this is expected to change as companies implement their net-zero commitments and suppliers scale their production to meet rising demand.
Air Products’ key role
In addition to being the exclusive offtaker for over 30 years for the green ammonia produced at the plant, Air Products is also the project’s main engineering, procurement and construction (EPC) contractor.
The firm’s triple role as an equity investor, EPC contractor and offtaker ensures that “we keep the focus on lowest cost of green hydrogen or ammonia”, notes Edmondson.
“Despite being the EPC contractor and a major investor in NGHC, Air Products’ primary objective is to generate revenue out of selling the ammonia that they have agreed to offtake from NGHC, not through the EPC contract,” he adds.
Phase two
With construction well under way for the integrated Neom green hydrogen and ammonia project, NGHC and its shareholders are now looking at a potential second phase.
“The Neom green hydrogen project is not expected to be a single investment,” says Edmondson.
“With all the ammonia to be produced at the plant under construction already sold to Air Products, there remains an interest in looking at additional investments for both the export market as well as the local market requirements for green hydrogen.”
Neom, which aims to be carbon-free and 100 per cent powered by renewable energy, is considering alternative fuels such as green hydrogen to achieve that goal.
Potential applications include mobility, given the plan to develop a rail system and other modes of transport for Neom.
“There was no domestic demand for green hydrogen fuel when the project was originally conceived in 2019. The market is continuing to evolve and we now see a stronger business case for local supply of green hydrogen,” says Edmondson.
The next phase is envisaged to be another large-scale project addressing domestic and international demand for green hydrogen and green ammonia.
Edmondson says more serious discussions about the project’s next phase will be on the agenda in 2024.
Ongoing innovation
The groundwork for the more widespread adoption of green hydrogen in Neom and across Saudi Arabia is under way.
In 2024, Neom’s energy and water subsidiary Enowa will open the Hydrogen and Innovation Development Centre (HIDC), which aims to produce and adopt decarbonised and clean synthetic fuels in partnership with Saudi Aramco.
Initially, the NGHC project at the HIDC will gather operational data from the facility’s first 20MW electrolyser from Germany’s ThyssenKrupp Nucera, which will be used at the NGHC plant.
This will help advance Enowa’s plans with Air Products Qudra to test advanced hydrogen fuel cell-based mobility and logistics solutions at Neom.
Neom factor
As a trailblazing project, Edmondson recognises the many opportunities that Neom has provided.
“We have had excellent support from Neom on both our land and permitting requirements as we have developed the project,” he says.
“We have also benefitted from legislation that allowed the first private grid in the kingdom and were granted the first industrial licence in Saudi Arabia for a green hydrogen plant.
“Neom has certainly risen to the challenge of supporting investors to make the project a reality.”
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Siemens Energy signs preliminary 14GW Iraq pact
9 May 2025
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Germany’s Siemens Energy and Iraq’s Electricity Ministry have signed a preliminary agreement to add 14GW of electricity generation capacity to Iraq’s grid.
The firms also signed two long-term service contracts for the Dibis and Al-Mussaib gas-fired power plants.
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Abu Dhabi hopes bigger is better with Disney theme park
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Commentary
Colin Foreman
EditorEver since Aldar Properties first launched the Yas Island project with its Yas Marina Circuit for the Abu Dhabi Grand Prix in 2006, Abu Dhabi has been steadily adding theme parks to the island’s roster of attractions. First, there was the Ferrari theme park, then came a water park, a Warner Bros theme park and, most recently, SeaWorld.
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The theory gained particular traction in the region when Dubai Parks and Resorts opened. The company, which was public until it was acquired by Meraas in 2021, reported significant losses as it struggled to attract enough visitors.
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The financial performance of theme parks on Yas Island has not been publicly disclosed. While it is accepted that they have been more successful than their counterparts in Dubai, some say that the island still does not have the critical mass required to establish itself as a global destination for theme park visitors.
Miral has developed a series of theme parks and other entertainment-related attractions on Yas Island
Enter Disney
Disney changes that. It is the largest brand in the theme park space and will be a major attraction, but with limited information released on the project so far, it is difficult to fully gauge how significant the project will be.
The official release said that the project will be developed and operated by Abu Dhabi developer Miral, adding that Disney’s in-house design and engineering unit, Walt Disney Imagineering, will lead creative design and operational oversight to provide a world-class experience. It did not give any details on the ownership of the project.
In Hong Kong, for example, a company, Hong Kong International Theme Parks, was established as a joint venture, with the Government of Hong Kong holding 57% and The Walt Disney Company holding 43%.
In Japan, the structure is different. The Tokyo Disney Resort is owned and operated by Oriental Land, and the company pays licences and royalties to The Walt Disney Company.
In interviews following the launch announcement, Miral CEO Mohamed Abdalla Al-Zaabi confirmed the arrangement will be like Tokyo.
Waterfront location
The official release for the Abu Dhabi launch also said that the project is on Yas Island, which only has limited areas of land to develop. The release also said that the land is waterfront, and imagery in the launch video shows the Abu Dhabi skyline in the background, suggesting the land is on the northern waterfront of Yas Island.
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Exclusivity clause
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Tourism gateway
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If that potential is realised, then the bigger is better theory will be proved right. If the park’s performance disappoints, then it will suggest the region is not such a great destination for theme parks after all.
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Photo credit: Kahramaa
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OQ to take interest in Oman renewable projects
8 May 2025
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“The direction seems to be for OQ Alternative Energy to own up to 25% shares in the upcoming solar and wind IPP projects in the sultanate,” says a source familiar with the plans.
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With this policy change, Oman will now be more closely aligned with the existing project structure in the UAE, where either Abu Dhabi National Energy Company (Taqa), Abu Dhabi Future Energy Company (Masdar) or the state utility, Dubai Electricity & Water Authority (Dewa), owns stakes in these projects.
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