NEOM's Massive $8.4 Billion Green Hydrogen and Ammonia Plant: Paving the Way for a Sustainable Tomorrow

Saudi Arabia: Shearman & Sterling offered complete guidance to NEOM Company on various fronts, including shareholder and corporate issues, project financing, land arrangements, project development, construction, operation, and maintenance, as well as other related aspects for the NGHC Project. NEOM's Green Hydrogen Company (NGHC) has secured financial closure for the biggest green hydrogen production facility globally.

The project, with an estimated investment value of USD 8.4 billion, secured funding from 23 domestic, regional, and international banks, and investment firms. The plant is presently under construction at Oxagon, located in NEOM's region in Saudi Arabia. NEOM's Green Hydrogen Company (NGHC) has achieved significant progress in establishing its green Hydrogen production plant in NEOM. The company has successfully inked an EPC agreement with Air Products, who will take charge of the plant's primary contracting and system integration. NGHC has also obtained a 30-year exclusive off-take agreement with Air Products for all green ammonia manufactured at the facility. The deal unlocks the full economic potential of renewable energy along the entire value chain.

The plant, located in NEOM, will produce green Hydrogen and green ammonia fuels in various formats for export to global markets, leading to a yearly decrease of 3 million tonnes of greenhouse gas emissions. The Kingdom of Saudi Arabia is home to this establishment.

NEOM Company is presently engaged in developing a giga-project that will feature towns and cities, enterprise zones and ports, research centres, sports and entertainment venues, as well as tourist destinations. The initiative serves as a key component of Saudi Arabia's 2030 Vision plan to expand and diversify its economy, positioning the nation for an influential role in worldwide development. By creating a new paradigm for sustainable living and working, NEOM Company aims to set a benchmark for future endeavours.

Leveraging 4 GW of renewable electricity, this pioneering project is not only the most extensive Hydrogen plant and Ammonia plant of all time but also represents the largest renewables project in history. Across the globe, there is a surge in green Hydrogen projects, with many companies, investors, governments, and environmentalists considering it a viable energy source that could aid in ending the dominance of fossil fuels and decelerating the pace of global warming.

The project team's legal proficiency and innovation are exceptional, particularly given that this is the first ever green H2 mega-project. Due to the absence of a green H2 market and the constantly evolving regulatory landscape, every aspect of the project required inventive thinking, encompassing commercial and legal structuring, technology. This includes licensing, EPC documentation, land and utilities arrangements, and export agreements.

The project had to comply with regulations across multiple jurisdictions worldwide, including the Kingdom of Saudi Arabia, the European Union, England and Wales, the United States, and others. The team's responsibilities on the project spanned all aspects of financing, which will be one of the biggest project financings in the history of KSA.