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Neom halts $1.5 billion desalination facility project

  • Neom halts $1.5 billion desalination facility project
    Credit: Pablo Gonzalez-Cebrian/SWM

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The joint development agreement (JDA) for a zero liquid discharge plant project in Saudi Arabia's Neom has expired and will not be renewed, resulting in the project's termination, sources familiar with the matter inform MEED.

In December 2022, a consortium comprising Neom subsidiary Enowa, Japan’s Itochu, and France’s Veolia signed a JDA for the project, about six months after they agreed to develop the advanced seawater reverse osmosis facility in Oxagon, Neom’s industrial cluster.

The facility was expected to deliver up to 2 million cubic meters per day (cm/d) of desalinated water to Neom, meeting approximately 30% of the gigaproject's projected total water demand upon completion. The project required an estimated investment of $1.5 billion-$2 billion.

The developer team initially projected the commercial operation date for the first phase of the project, with a capacity of 500,000 cm/d, to be in 2025.

In a statement to MEED, Enowa noted that Neom's water needs have changed over the past year, "leading us to adopt a stepwise approach to expanding capacity."

Enowa noted that Neom's water needs have changed over the past year,  leading us to adopt a stepwise approach to expanding capacity

The statement added: "As a result, we've decided to discontinue our joint development agreement (JDA) for this project. This decision was made after open communication and extensive discussions to ensure mutual understanding and commitment.

"Our dedication to delivering sustainable and innovative solutions remains unchanged, and we value our collaboration with international partners as we adjust our approach to best serve Neom's long-term goals."

The state-of-the-art desalination plant aimed to utilize 100% renewable energy and advanced membrane technology to generate separate brine streams, facilitating the development and commercialization of brine-derived products. The plan involved converting brine, the primary waste output of desalination, into industrial materials for local use or export.

Enowa had previously stated that brine produced by the desalination plant would be treated to supply industries requiring high-purity industrial salt, bromine, boron, potassium, gypsum, magnesium, and rare metal feedstocks.

Neom had appointed Japan’s Sumitomo Mitsui Banking Corporation as the financial adviser for the project, with UK-based DLA Piper serving as the legal adviser and Canada’s WSP as the technical adviser.

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