NEOM’s $8.4 billion world-scale green hydrogen and green ammonia production facility

Shearman & Sterling advised NEOM Company on all aspects (including shareholder and corporate matters, project financing, project development, land arrangements, construction, operation and maintenance and other ancillary aspects) of the NGHC Project, a $8.4 billion world-scale green hydrogen and green ammonia production facility. The project is a joint venture between NEOM Company, Air Products and ACWA Power.

Located at NEOM, in the Kingdom of Saudi Arabia, the facility will produce green hydrogen and green ammonia fuels in various forms for export to global markets, saving the world 3 million tonnes per year of greenhouse gas emissions.

NEOM Company is developing a giga-project that will include towns and cities, ports and enterprise zones, research centers, sports and entertainment venues, and tourist destinations. It is a centerpiece of Saudi Arabia’s 2030 Vision plan to grow and diversify the Saudi economy and position the country to play a leading role in global development. It aims to build a new model for sustainable living and working.

This ground-breaking project, powered by 4 GW of renewable electricity, is the largest renewables project in history as well as the largest hydrogen plant and ammonia plant in history. Around the world, a green hydrogen rush is underway, and many companies, investors, governments and environmentalists believe it is an energy source that could help end the reign of fossil fuels and slow the world’s warming trajectory.

The legal expertise and innovation which the team have brought to the project is stand-out given that this is genuinely a first-in-kind project, being the first green H2 mega-project. The lack of any market for green H2 and the constantly changing regulatory environment required novel thinking on every aspect including commercial and legal structuring, EPC documentation, technology licensing, offtake arrangements, land arrangements, utilities arrangements, and export arrangements. In terms of regulation, our work was required to cover many jurisdictions (Kingdom of Saudi Arabia, the European Union, England and Wales, United States and other) of the world. The team's work on the project includes all aspects of the financing, which will be one of the largest project financings in KSA history.