Saudi Arabia’s Acwa Power Co. plans to build the kingdom’s second multibillion-dollar green hydrogen plant, despite struggles to sell output from the first project.
Acwa Power has selected Tecnicas Reunidas SA and China’s Sinopec Guangzhou Engineering to carry out a front-end engineering design contract for the project, the Madrid-based firm said in a trading notice on Saturday.
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The Yanbu plant will include 4 gigawatts of electrolysis capacity that will use wind and solar energy to split water molecules, generating 400,000 tons per year of green hydrogen, according to the statement.
Acwa Power did not immediately respond to a request to comment.
Saudi Arabia’s decision to launch another green hydrogen project signals its continued support for the nascent industry, despite enormous uncertainty over global demand for the product, which can be used as a fuel or fertilizer.
Acwa Power is one of the developers of a 4-gigawatt green hydrogen project within Neom, where partner Air Products & Chemicals Inc. has so far struggled to find buyers. The developer expects the $8.5 billion Neom plant to produce around 219,000 tons of green hydrogen, much less than the Yanbu project.
Tecnicas Reunidas and Sinopec will carry out the preliminary design work over the next 10 months. After that, they will seek a contract to build the plant, Tecnicas Reunidas said. Commercial operations are slated to start by 2030.
The project is intended to serve export markets. Acwa Power signed memorandums of understanding with Edison SpA, TotalEnergies Renewables SAS, Zhero Europe BV and EnBW Corp. to create a supply chain for green hydrogen from Saudi Arabia to Europe earlier this month.
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