Air Products announced on Tuesday it will form a joint venture to build a $5 billion world-scale hydrogen-based ammonia plant in Saudi Arabia’s planned city of Neom.

The company signed an agreement with Saudi utility company ACWA Power and Neom – a Saudi state-owned company planning the development of a $500 billion economic zone. The parties will equally own the joint venture, Kallanish Energy reports.

The plan is to build a plant to produce 650 tonnes per day of hydrogen through electrolysis, powered by roughly 4 gigawatts of renewable energy (solar, wind, and storage). The project will also produce nitrogen by air separation using Air Products technology and produce 1.2 million tonnes per annum (Mtpa) of green ammonia.

The fuel produced in northwestern Saudi Arabia will then be shipped globally. Air Products will export ammonia to be dissociated to produce green hydrogen for the transportation market. The company will be the exclusive off-taker of ammonia.

Slated to begin operations in 2025, the project has the potential to reduce CO2 emissions by 3 Mtpa, by powering the transportation sector with carbon-free hydrogen. This volume is equivalent to cutting pollution from 700,000 cars, the companies said.

This post appeared first on Kallanish Energy News.