Saudi hydrogen projects — part of the country’s Vision 2030 program — risk suffering from sunk costs and delayed sales revenue.

Like many of the “gigaprojects” associated with Crown Prince Mohammed bin Salman’s Vision 2030 economic transformation program, the massive green hydrogen plant planned for the new city of NEOM basically makes the assumption from “Field of Dreams”: “If you build it, they will come.”

Demand was not thought to be in question when it was first planned back in the late 2010s, given the prevailing conventional wisdom about the global energy transition. Most of the facility’s production would be placed in the European market on long-term contracts, which would be secured well before completion through a reseller.

When financing had closed in 2023, a US company, Air Products, agreed to purchase the entire volume and resell it. Air Products was expected to invest in receiving terminals in Europe as well, putting it in control of the midstream segment of what was assumed would be a burgeoning new flow of fuel.

This seemingly guaranteed demand for the project, allowing construction to begin on the $8.4 billion facility before contracts were in place........

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