meed-logo

line1 line2 line3
SIGN IN / REGISTER

Neom hydrogen project reaches 60% completion rate

6 December 2024

 

Register for MEED’s 14-day trial access 

Construction work on the $8.4bn Neom green hydrogen project in Saudi Arabia has reached a 60% completion rate.

According to a source close to the project, work is ongoing across all three sites, including the wind, solar and green hydrogen production facilities.

At this rate, the project appears on track to meet the company’s 2026 target commercial operation date.

Former Neom Green Hydrogen Company (NGHC) CEO, David Edmondson, told MEED in November last year that “the first ammonia production is expected sometime between mid to late summer of 2026”.

The executive also confirmed at the time that NGHC and its shareholders “are now looking at a potential second phase” of the project.

“The Neom green hydrogen project is not expected to be a single investment,” Edmondson said.

The US-headquartered industrial gases firm Air Products, Saudi utility developer Acwa Power and Public Investment Fund-backed Neom equally own NGHC, the project company implementing the scheme.

In addition to being the project’s co-owner, main engineering, procurement and construction (EPC) contractor and system integrator, Air Products is also the exclusive offtaker for over 30 years for the green ammonia produced at the facility.

The integrated facility will produce hydrogen, which will be synthesised into carbon-free ammonia for exclusive export by Air Products to global markets.

The Neom green hydrogen project 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 about 1.2 million tonnes of ammonia a year.

Construction works have been in full swing for the various elements of the project, after it reached financial close in May 2023.

India’s Larsen & Toubro (L&T) is the EPC contractor for the project’s renewable energy and transmission and distribution package.

L&T’s EPC scope includes a 2,200MW solar plant, a 1,370MW wind farm, a 400MW battery energy storage system and a transmission network extending 190km.

In October last year, NGHC received the first set of wind turbines for one of the two renewable energy plants that will power the integrated green hydrogen and ammonia production facility.

MEED reported in May that Greek contractor Archirodon had won the $100m design-and-build contract for the jetty catering to the project.

The jetty will handle liquid ammonia exports to Europe. The project is expected to be completed in 2025.

Photo credit: NGHC

https://image.digitalinsightresearch.in/uploads/NewsArticle/13078063/main.jpg
Jennifer Aguinaldo

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Scatec and Egypt Aluminium seal $650m deal

    14 March 2025

    Oslo-headquartered renewable energy developer and investor Scatec has signed a 25-year US dollar-denominated corporate power-purchase agreement with Egypt Aluminium for a 1.1GW solar photovoltaic (PPV) plus 100MW/200MWh battery energy storage system (bess) plant project in Egypt.

    According to Scatec, the PPA is backed by a sovereign guarantee.

    The estimated total capital expenditure for the solar PV plus bess project is approximately $650m, which will be funded by approximately 80% non-recourse project debt,and the remainder, by equity from Scatec and partners.

    Scatec owns 100% of the project but is targeting to reduce its long-term economic interest by inviting additional equity partners, the firm said.

    Scatec will be the designated engineering, procurement and construction (EPC )service provider, with an EPC share of approximately 90% of total capex. It will also act as asset manager and operations and maintenance service provider for the project.

    It said the key next steps for the project are to work with the relevant authorities to allocate land, finalise grid connection and secure financing,

    Scatec said it aims to reach financial close and start construction within the next 12 months.

    Egypt Aluminium is the largest aluminium producer and industrial electricity consumer in Egypt and exports approximately 60% of its production to Europe.

    The solar PV plus bess project will be instrumental for Egypt Aluminium’s ambition to decarbonise its aluminium production and to meet the EU’s Carbon Border Adjustment Mechanism (CBAM) requirements which will be introduced in 2026, Scatec added.

    The project was first announced in January last year, when Egypt's Public Business Sector Ministry and Scatec were reported to be exploring the development of a solar power plant to supply clean energy for the operation of the Nagaa Hammadi aluminium complex in Egypt.

    The "groundbreaking" project is the first utility-scale PPA with an industrial offtaker in Egypt, said Scatec CEO Terje Pilskog.

    Growing projects pipeline

    It is the latest project in Egypt for Scatec, which withdrew in 2023 from two solar photovoltaic projects in Iraq and a green hydrogen project in Oman to focus its resources on developing projects in the North African territory.

    Scatec is the lead developer for the Egypt Green hydrogen project, which was first announced in 2021. Scatec, Abu Dhabi's Fertiglobe and the local Orascom Construction are developing the project in partnership with The Sovereign Fund of Egypt and the Egyptian Electricity Transmission Company.

    In July 2023, Scatec signed an agreement with Egypt's New & Renewable Energy Authority (NREA) to secure land for a planned 5,000MW wind farm in western Sohag.

    In September last year,  Scatec signed a US-dollar-denominated 25-year PPA with the Egyptian Electricity Transmission Company for a 1,000MW solar and 100MW/200MWh battery storage hybrid project in Egypt.

    Photo credit: Scatec

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13491318/main.jpg
    Jennifer Aguinaldo
  • JLL wins Pure Data Centres contract

    14 March 2025

    London-headquartered Pure Data Centres Group (Pure DC) has appointed Jones Lang LaSalle (JLL) to provide integrated facilities management services at its new Yas Island data centre in Abu Dhabi.

    The initial phase of Pure DC's first facility in the UAE went live in late February. When fully complete, the data centre campus will provide 45MW of capability, JLL said in a statement.

    JLL’s scope of work includes ongoing maintenance and support for the Yas Island data centre’s low-voltage and high-voltage electrical systems, including its uninterruptible power supplies, switchgear and hydrotreated vegetable oil (HVO)-powered generators, as well as its hybrid air and liquid cooling systems.

    Related read: Region poised for huge investment in data centres

    JLL will also be responsible for network and ICT management, alongside delivering front-of-house facilities management services, such as cleaning and landscaping.

    The firm said the new project will "reinforce its reputation as a leading consultant and operator across existing and new hyperscale data centre locations within the Europe, the Middle East and Africa (Emea) region".

    JLL recently added three senior executives in its Emea team after identifying a 742MW hyperscale construction boom in the region, the firm added.

    Saudi joint venture

    In November last year, Pure DC and the local  announced a joint venture to develop hyperscale data centres in Saudi Arabia.

    They said the joint venture plans to develop multiple 100MW-capacity data centre campuses in th kingdom to meet growing local and international customer demand.

    Founded in 2021 in London, Pure DC is majority-owned by funds of US-based Oaktree Capital Management, which have committed significant equity to fund the firm's global development pipeline.

    According to Pure DC's website, it has over 200MW of IT capacity live or under development in markets across Europe, Asia and the GCC.

    Aspiring AI hubs

    The UAE has the highest concentration of data centres, while Saudi Arabia is the fastest-growing regional market, with both countries, along with Qatar, aiming to be digital hubs and key players in AI.

    Globally, total investment in data centres reached $70.6bn in 2024 and is projected to grow by 5% to $74.3bn in 2025, according to GlobalData.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13491266/main.jpg
    Jennifer Aguinaldo
  • Abu Dhabi extends battery storage bid deadline

    14 March 2025

    Prequalified bidders were given a three-week extension to submit their proposals for a contract to develop and operate a battery energy storage system (bess) plant project in Abu Dhabi.

    The project client, Abu Dhabi-based utility offtaker Emirates Water & Electricity Company (Ewec), expects to receive bids by 24 March, three weeks from the previous tender closing date, according to a source familiar with the project.

    Called Bess 1, the 400MW project will closely follow the model of Abu Dhabi’s independent power project (IPP) programme, in which developers enter into a long-term energy storage agreement (ESA) with Ewec as the sole procurer.

    The first plant will be in Al-Bihouth, about 45 kilometres (km) southwest of Abu Dhabi, and the second plant will be in Madinat Zayed, about 160km southwest of the city.

    Ewec issued the request for proposals to prequalified companies in July last year and initially set 30 November 2024 as the last day to submit proposals. 

    MEED previously reported that up to four consortiums comprising infrastructure investors, developers and contractors have been formed and are preparing to submit their proposals for the contract.

    Ewec prequalified 11 managing partners that can bid either individually or as part of a consortium with other prequalified bidders. These are:

    • Acwa Power (Saudi Arabia)
    • China Electrical Equipment International (China)
    • EDF (France)
    • International Power (Engie)
    • Jera (Japan)
    • Jinko Power (China)
    • Korea Electric Power Corporation (Kepco, South Korea)
    • Marubeni (Japan)
    • Sembcorp Utilities (Singapore)
    • SPIC Huanghe Hydropower Development Company (China) 
    • Sumitomo Corporation (Japan)

    Ewec prequalified 18 other companies that can bid as part of a consortium. These are:

    • Abrdn Investcorp Infrastructure Investments Manager (UK)
    • AGP Capital (US)
    • Al-Masaood (UAE)
    • Al-Fanar Company (Saudi Arabia)
    • Alghanim International (Kuwait)
    • Aljomaih Energy & Water Company (Jenwa, Saudi Arabia)
    • Amplex-Emirates (local)
    • ATGC Transport & General Trading (local)
    • Amea Power (local)
    • China Electric Power Equipment & Technology (China)
    • China Machinery Engineering Corporation (China)
    • GE Capital EFS Financing (US)
    • Itochu (Japan)
    • Korea Western Power Company (Kowepo, South Korea)
    • Pacific Green (US)
    • Samsung C&T (South Korea)
    • Swift Energy (Malaysia)
    • X-Noor Energy Equipment Trading  (UAE)

    The planned facility is expected to provide up to 800 megawatt-hours (MWh) of storage capacity.

    The ESA will be for 15 years, commencing on the project’s commercial operation date, which falls in the third quarter of 2026. 

    According to Ewec, the bess project will provide additional flexibility to the system and ancillary services such as frequency response and voltage regulation.

    Global bess market

    The overall capacity of deployed bess globally is expected to reach 127GW by 2027, up from an estimated cumulative deployment of 36.7GW at the end of 2023, according to a recent GlobalData report.

    The report named Chinese companies BYD and CATL and South Korean companies LG Energy Solutions and Samsung SDI among the top battery technology providers globally.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13484751/main.gif
    Jennifer Aguinaldo
  • Indian and Spanish team wins Ras Mohaisen EPC package

    13 March 2025

    A team of India's Larsen & Toubro (L&T) and Madrid-headquartered Lantania has won the engineering, procurement and construction (EPC) contract for the Ras Mohaisen independent water project (IWP) in Saudi Arabia.

    State utility offtaker Saudi Water Partnership Company (SWPC) signed the water-purchase agreement contract for the project with a consortium comprising Riyadh-headquartered utility developer Acwa Power, Hajj Abdullah Ali Reza & Partners and Al-Kifah Holding Company in February. 

    According to L&T,  its Water and Effluent Treatment business division will execute the EPC contract for the desalination facility.

    The state water offtaker received two bids for the contract in April last year. The other bidder was Spain’s Acciona.

    The Ras Mohaisen IWP will be able to treat 300,000 cubic metres of seawater a day (cm/d) using reverse osmosis technology.

    It will also include storage tanks with a capacity of 600,000 cubic metres, equivalent to two operating days, intake and outfall facilities, process units and pumping stations.

    The build, own and operate project will also include electrical, automation and instrumentation systems and a solar photovoltaic plant. 

    The project is expected to reach commercial operation by the second quarter of 2028.

    The plant will be located in Al-Qunfudhah Governorate, about 300 kilometres south of Mecca, on the Red Sea coast in Saudi Arabia’s Western Region.

    The project is expected to enhance water supply chains and is intended to serve the Mecca and Al-Baha regions.

    Netherlands-headquartered KPMG acted as SWPC’s financial adviser, with UK-based Eversheds Sutherland acting as the legal adviser for the project.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13485233/main.gif
    Jennifer Aguinaldo
  • Egypt faces complex economic reality

    13 March 2025

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13483136/main.gif
    MEED Editorial