They covered projects announced by various consortiums worldwide, all in early-stage development. An exception appeared in Saudi Arabia’s $5bn hydrogen-based ammonia plant, a project of the NEOM Energy & Water Company.

Many conference participants and panelists saw NEOM’s ambitious green hydrogen-to-ammonia project as the most likely leader. They expressed confidence that, among the many major green hydrogen initiatives now appearing in the news, this one at least would reach actual production.

Discussions occurred at the World Hydrogen MENA conference, held in Dubai last month. It brought together more than 200 attendees for two days of panels and networking. Sponsored by the MENA Hydrogen Alliance, an initiative of Dii Desert Energy, the conference was delivered by the World Hydrogen Leaders networking platform of UK-based Green Power Conferences.

NEOM near to FID

NEOM, the clean energy city under development in northwest Saudi Arabia, was launched in 2019 with the backing of the country’s Public Investment Fund (PIF). In 2020 it announced a joint venture to develop a major green hydrogen and ammonia production facility in the new city’s industrial sector, to be owned equally by NEOM and two partners.

Acwa Power, a Riyadh-based power generation developer that is now half owned by PIF, will lead development of wind and solar power assets. US-based Air Products will develop a hydrogen-based ammonia plant. It will be the exclusive off taker and will invest $2bn in distribution.

The plant will produce 650 tonnes (t) of hydrogen daily, to produce 1.2 million tonnes (Mt) annually of ‘green’ ammonia. Electrolysers with a capacity of 2GW will be supplied by thyssenkrupp Unde Chrlorine Engineers, a joint venture with Italy’s Industrie De Nora.

Energy for the electrolysers will be derived from wind (1.5GW) and solar PV (2.5GW) capacity to be developed on-site, with a first phase utility-scale production beginning in 2026.

Considering the sheer size of it, there have been doubts. But according to Roland Kaeppner, Executive Director, NEOM Energy & Water Company (the energy and water subsidiary recently branded ENOWA), there will be FID in June, with delivery of the first electrolyser unit in '24 and completion of the plant in '26.

Speaking at the Dubai conference in March, he also mentioned the development of an on-site innovation center with 20MW electrolysis capacity. This took shape in NEOM’s recently announced Hydrogen and Innovation Development Centre (HIDC). The project progressed further last week with Acwa Power and Air Products signing a $900m engineering, procurement and construction (EPC) contract.

As for off takers, Kaeppner mentioned 'flexible ammonia' for mobility markets in Europe.

Offtaker options

Cornelius Matthes, CEO of Dii Desert Energy, says that NEOM is a leader for several reasons. First, he points to the players involved, with ACWA Power’s impressive record as a developer of renewables and Air Products’ substantial financial depth making it a credible guarantor of the entire off-take from the project.

He also says that the purely commercial nature of the project adds to its viability. While the Saudi leadership is a key partner, it is expecting the project to succeed without direct subsidy.

“If you look at announcements of major projects, they’re often subject to special regulatory conditions and subsidies,” he says. “This is a bold project without any such supports.”

Matthes’ organization Dii (Desertec Industry Initiative), is a Dubai-based public-private sector association that promotes renewable energy development. Founded in 2009 with support of the German government to explore the potential of MENA renewables to supply European power markets, it is now pursuing its Desertec 3.0 agenda that looks at renewables as the basis of entire energy systems.

He sees, as the last piece of the puzzle for any major hydrogen project, a critical need to secure off-takers. Here again he sees significant advantages for NEOM.

“It is a bet by Air Products on a market starting four years from now,” he says. “They’re looking at options in Europe, especially in the mobility sector.”

Matthes references the growing array of hydrogen-based infrastructure in Germany, which already has more than 100 hydrogen filling stations (currently supplied with gray hydrogen). He sees a building momentum for a hydrogen market for cars, busses, trains, and trucks, appearing for example in Daimler Trucks’ advanced work on its GenH2 Truck.

Such private sector initiatives are finding support in Germany’s National Hydrogen Strategy, approved in 2020, accompanied by a stimulus package that is supporting more than 60 carbon-free hydrogen projects in the country.

In Matthes’ view, such developments in Germany and elsewhere in Europe are the necessary counterpart to MENA’s supply projects.

“Today, we need clarity of off-take, without it we cannot finance any projects,” he says. “It’s why Dii is connecting production and demand.”

He says that when the off takers are identified, then European buys can decide on the amounts, and benefit from competition among the MENA producing countries.

Pipeline potential

The remarkable fall in the cost of renewable power has surely enabled commercial green hydrogen ventures such as NEOM. It is equally clear that low-cost renewable power is not enough to launch them.

“Will need bold partnerships of government and industry,” says Matthes, “something like a ‘Marshall Plan’ for hydrogen.”

To really launch a MENA hydrogen economy, Matthes points to a key piece of infrastructure that could come about through international collaboration. A pipeline connecting the eastern Mediterranean with Europe would be the kind of ‘Marshall Plan’ project he has in mind.

While natural gas pipelines in the western Mediterranean currently link Algeria, Tunisia, and Morocco to Spain, Portugal and Italy, there is no pipeline in the east. But a hydrogen-capable pipeline there could be a breakthrough for NEOM and others. Matthes says that within a 300-kilometer radius of Sharm el-Sheikh (where the COP 27 conference will occur this fall) are places with potential 100+ GW production potential in Saudi Arabia, Egypt, and Jordan.

He believes that while liquid organic hydrogen carriers can help to launch commercial hydrogen, pipelines will be a key piece of infrastructure. These alone will be able to meet the massive demand foreseen for the so-called ‘Hydrogen Backbone’ in Europe. A pipeline can easily carry NEOM’s 2GW capacity and much more, as a large pipeline could have up to 60GW capacity. It would dwarf the capacity of undersea electric cables.

Putting it in place would require bold commitments from governments in a long-term partnership for the import of the green molecules. The European Investment Bank (EIB) would be the most logical entity to manage the project, Matthes thinks.

“Nord Stream 2 is now obsolete,” he says. “It’s 11 billion Euros stranded under the Baltic Sea.”

“An Eastern Med pipeline with a similar capacity could be built for 15-17 billion Euros, about 50% more,” than the now-suspended Nord Stream 2.

Seeking certification scheme

The MENA Hydrogen Alliance used the occasion of the conference to launch a working group devoted to hydrogen certification. This certification piece of the hydrogen puzzle was announced the same week Friday, leading conference organizers to acclaim the first-ever Middle East conference devoted exclusively to carbon-free hydrogen as ‘Dubai hydrogen week.’