Baker Botts Wins Award for Pioneering Work on Saudi Arabia's NEOM Green Hydrogen Project
Key Ideas
- Baker Botts was awarded for its role in advising on the landmark NEOM Green Hydrogen Project in Saudi Arabia, which is a significant market leader in the field.
- The project involves large-scale green hydrogen production, with a focus on innovative financing and offtake agreements, setting a precedent for future projects globally.
- The unique offtake agreement devised by Baker Botts for the project, involving the sale of green ammonia to Air Products for 30 years, overcame challenges related to market uncertainty and lack of established market prices.
- The firm's expertise in liquefied natural gas (LNG) was instrumental in tackling the offtake problem, positioning them well for future green hydrogen projects as the market expands.
Baker Botts was recognized at the Legal Business Awards for its outstanding work on the NEOM Green Hydrogen Project in Saudi Arabia, advising on a groundbreaking energy initiative that is set to produce significant amounts of carbon-free hydrogen. The project, with an $8.4bn financing package and 30-year offtake agreement, marks a significant milestone as the first of its kind to reach financial close on such a large scale. The importance of hydrogen in global energy transition programs is highlighted, with various countries providing substantial subsidies for green hydrogen production. Baker Botts' role in structuring a unique offtake agreement, ensuring the purchase of green ammonia over 30 years, was pivotal in overcoming market uncertainties and kickstarting the project. Leveraging their LNG expertise, the firm navigated complex challenges related to transportation and market pricing. This innovative approach not only secured the project's viability but also positioned Baker Botts as a key player in future green hydrogen endeavors.