The $5 billion plant will be jointly owned by Air Products, Saudi Arabia’s ACWA Power and Neom, a new mega-city planned near Saudi Arabia’s borders with Egypt and Jordan.
The completed facility will produce 650 tons of green hydrogen daily, enough to run around 20,000 hydrogen-fueled buses, Air Products said. The fuel will be shipped as ammonia to end markets globally then converted back to hydrogen. Ammonia production is expected to start in 2025.
Pennsylvania-based Air Products claims to be the world’s largest producer of hydrogen and a leader in the liquefied natural gas field technology. The company trades on the New York Stock Exchange with a market value of nearly $60 billion.
The project would be a big step forward for Saudi Arabia’s ambition for Neom to become an important global center for renewable energy and green hydrogen. The country is establishing Neom as a special economic zone, with an ambition to host 1 million people from around the world. “This is a pivotal moment for the development of Neom and a key element in Saudi Vision 2030 contributing to the Kingdom’s clean energy and circular carbon economy strategy,” Neom CEO Nadhmi Al Nasr said in a statement.
Speaking to analysts on a conference call on Tuesday, Air Products CEO Seifi Ghasemi said the company is confident the project will be viable without subsidies given the accelerating global race for low-carbon transport fuels. Any government support would be “icing on the cake.”
“There are 260 million commercial vehicles in the world. If 1 percent converts to hydrogen, you end up with huge numbers that would require 50 plants like this,” Ghasemi said. “We’ve been working on this for four years, and our strategy was to be the first to build a mega-scale plant.”
In addition to the $5 billion plant, the project will require $2 billion of new distribution infrastructure, to be owned by Air Products.