Saudi ACWA Not to Start Other Hydrogen Projects before NEOM Venture Advanced

ACWA Power, the energy producer backed by Saudi Arabia’s sovereign wealth fund, sees big opportunities in the hydrogen market but the company isn’t planning to add another hydrogen project to its portfolio for some time until its venture with NEOM and Air Products is at an advanced level, its CEO said.

“The world is projecting a massive green hydrogen market ahead of us, so the market is there for us – we don’t need to worry about the market,” Paddy Padmanathan said in an interview with Arab News last week. “For us it’s about making sure we deliver the first project to give us the confidence and then the capabilities and capacity to then start replicating it,” he said.

Air Products, in conjunction with ACWA Power and NEOM, signed an agreement last year for a US$5 billion venture to produce 650 tons per day of green hydrogen by heating water using renewable energy, as well as 1.2 million tons per year of green ammonia for exporting the hydrogen to the global market. The project, which will be built in NEOM, is scheduled to be onstream in 2025.

“There is a lot of work that is going on by the three partners in order to prepare the site, get on with the engineering, and develop the design. Because it’s the first project of its kind we really want to spend the time to optimize it,” he said. The venture has already appointed advisers, including Lazard, for the financial planning, and there are numerous other technical advisers, Padamanthan said.

Lazard, which advised Saudi oil giant Aramco on its initial public offering in 2019, approached banks early this year to sound out their appetite for the project, Reuters previously reported, citing sources familiar with the matter.