Saudi Neom joint venture working with Lazard on $5b hydrogen project

Dubai/London: A joint venture comprising Air Products, ACWA Power and Neom has hired financial firm Lazard to advise it on a planned $5 billion hydrogen project in the Neom high-tech business zone in Saudi Arabia, sources said.

Lazard, which advised Saudi oil giant Aramco on its initial public offering in 2019, has recently approached banks to sound out their appetite for the project, said two sources familiar with the matter.

Lazard, the world’s largest hydrogen producer New York-listed Air Products, Saudi energy developer ACWA Power and NEOM did not immediately respond to requests for comment.

The project, which will be equally owned by the three partners, will produce green ammonia for export to global markets, the companies said in July last year.

Saudi Arabia is expected to borrow tens of billions of dollars this year to fill state coffers hit by lower oil prices and to boost liquidity at state entities such as the Public Investment Fund (PIF), NEOM’s cornerstone investor.

Neom – announced in 2017 as a pillar of Saudi plans to diversify the economy – is a 26,500-square-km (10,230-square-mile) high-tech development on the Red Sea with several zones, including an industrial and logistics areas, planned for completion in 2025.

This week, Saudi Arabia’s crown prince, Mohammed bin Salman, unveiled plans to build a zero-carbon city at Neom, with infrastructure costs of $100 billion to $200 billion.

Hydrogen has gained traction as the future green fuel of choice, increasingly touted as a way to decarbonise emissions-intensive heavy industry and transport sectors.

The $5 billion project in NEOM will consist of a 1.2 million tonnes a year green ammonia plant, which will use hydrogen produced from an electrolyser powered by more than 4 GW of solar, wind and storage. Production is due to begin in 2025.