Regarding the project's history, Bols explained in 2024: "Our engineers developed it about eight years ago. We then searched for a suitable location that offers space for both green energy generation and port infrastructure. It was also important to obtain the appropriate permits and find suitable partner companies. So it needed a certain lead time, but that's understandable. There was nothing worldwide that would be comparable or that could serve as a reference point."
And are there already customers for the hydrogen from NEOM? Bols confirms: "Yes, there are! We distinguish between two groups: On the one hand, smaller customers, especially actors in the mobility sector such as operators of regular service buses." Besides H₂ molecules, Air Products also provides its own refueling station technology. "Additionally, we focus on the use of hydrogen in heavy-duty transport, and the operation of H₂ freight or local transport trains is also interesting." However, large-scale customers are particularly important. In June 2024, Air Products signed a 15-year offtake agreement with TotalEnergies, which will purchase around 70,000 tons of green hydrogen per year from 2030 for the decarbonization of its refineries in Northern Europe. "Such contracts get things rolling," says Bols.
Other Projects on Hold
While the NEOM project progresses, other hydrogen projects in Saudi Arabia are on hold. According to a GTAI report, in October 2024, the Public Investment Fund's (PIF) plans to invest at least 10 billion US dollars in blue and green hydrogen projects through the Energy Solution Company (ESC), which was established in summer 2024, suffered a setback: the ESC was dissolved. The role of driving Saudi Arabia's hydrogen sector is now expected to be taken over by Riyadh-based power plant developer ACWA Power.
Little progress has been made on other major projects with international partners such as French Engie, Japanese Marubeni Corporation, and a South Korean consortium since the signing of memorandums of understanding. This also applies to the most important H₂ project of the state-owned oil production company Saudi Aramco, the production of blue hydrogen as part of the Jafurah gas fracking project currently under development. An annual production of 11 million tons of blue ammonia is targeted here by 2030. However, due to the lack of offtake agreements, the project has not made progress so far.
Ammonia as the Preferred Transport Medium
Once offtake agreements are in place, another question comes to the forefront: How should the hydrogen be transported? The distance between Saudi Arabia and European consumer markets is several thousand kilometers. The answer lies in conversion to hydrogen derivatives such as ammonia.
"Pure hydrogen is unsuitable for intercontinental transport," explains Prof. Dr. Michael Sterner, hydrogen expert at OTH Regensburg, in an interview with H2-News.de. "The low density of the gas and the necessary cooling to minus 253 degrees Celsius make direct transport uneconomical." Ammonia, on the other hand, can be liquefied at minus 33 degrees Celsius and transported in special tankers – a technology that is already used on a large scale today.
In the NEOM project, the hydrogen produced will therefore be directly processed in an adjacent ammonia synthesis plant operated by Danish company Topsoe. The ammonia can then either be used directly as fuel or converted back into hydrogen at the destination.
A recent study by the Fraunhofer Institute for Solar Energy Systems ISE has systematically investigated the costs of various transport options for green hydrogen. The results are clear: For long transport routes, such as those between Saudi Arabia and Germany, ammonia is the most economical option – at least as long as no pipeline network is available.
