US-based Air Products signed a $5 billion (Dh18.4bn) agreement with Saudi Arabia's Acwa Power and Neom to build the world’s largest green hydrogen-based ammonia production facility in the kingdom's planned futuristic city.
The scheme, which will be owned jointly by the three parties, will be located at Neom in the north-west of Saudi Arabia within the planned $500bn city straddling the kingdom’s borders with Egypt, Palestine and Jordan.
The agreement will allow the kingdom to produce green hydrogen through renewables-powered electrolysis, which will be used in the production of ammonia for export to global markets.
The project marks Neom’s first international partnership in the renewable energy field.
Ammonia is used to manufacture plastics, pesticides, dyes and many household and industrial cleaning agents. Green hydrogen is produced using clean electricity generated by renewable energy, which electrolyses water, separating hydrogen from oxygen.
Hydrogen has risen in prominence as a cleaner, alternative fuel used in storage, transport, heating and industrial processes. Saudi Arabia, the world’s largest oil exporter, is looking to free up more crude for export by adding more renewable energy capacity to its grid. The country is targeting the addition of 60 gigawatts of clean energy to the grid by 2030.
The green hydrogen scheme within Neom will use 4GW of renewable power from solar, wind and storage to produce 650 tonnes per day of hydrogen from electrolysis using technology supplied by German firm Thyssenkrupp. The project, which will come on stream in 2025, will produce around 1.2 million tonnes of green ammonia per year. Air Products will be the exclusive off-taker for the product, which it plans to dissociate to produce green hydrogen for use in transportation.
The project will also offset around three million tonnes of carbon dioxide emissions annually and eliminate smog-forming pollutants, equivalent to that produced by more than 700,000 cars, according to Seifi Ghasemi, chairman, president and chief executive at Air Products.
The partnership with Acwa Power and Air Products demonstrated Neom’s ability to "generate significant partnership opportunities for international and national investors”, Neom chief executive Nadhmi Al Nasr said.
Air Products previously formed an $8bn power and gasification joint venture with Saudi Aramco and Acwa Power in 2018.
The US firm will hold the majority stake in the venture, which will take feedstock from the Saudi Arabian oil producer's Jazan refinery and convert it into power and hydrogen.
Neom has also looked at cleaner ways of desalinating water, one of the most energy- intensive industrial processes.
The futuristic city plans to use a ’solar dome’ technology consisting of an array of mirrors to focus solar radiation on glass and steel structures to heat seawater.