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Oman LNG weighs scope for hydrogen clusters

Oman LNG new1 (1)
Oman LNG new1 (1)

Key goal: Agreement signed for initial ‘Pre-Feasibility Study to Assess Hydrogen and Energy Transition Clusters at Sur Industrial City’

Oman LNG has inked a potentially landmark agreement which could enable the majority state-owned gas liquefaction company to transition away from fossil fuels towards a greener energy future.

The pact, signed with the Sustainable Energy Research Centre (SERC) at Sultan Qaboos University (SQU) over the weekend, will help kick off an initial ‘Pre-Feasibility Study to Assess Hydrogen and Energy Transition Clusters at Sur Industrial City’, where Oman LNG’s $2 billion gas liquefaction complex is located.

In a post, Oman LNG said the agreement will support the objectives of the National Hydrogen Alliance (Hy-Fly), a high-profile grouping of public and private organisations that have joined forces to advance the country’s ambitions with regard to national energy security, decarbonisation, and a transition to a green economy.

In addition to exploring energy transition and decarbonisation opportunities within Sur Industrial City, the study will also look at the potential for establishing hydrogen clusters across the Sultanate of Oman – a move that aligns with the efforts of Hy-Fly’s Project Management Office, presently overseen by the Renewal Energy Unit of Petroleum Development Oman (PDO).

The goal of the study, said Oman LNG, is to create a “roadmap” for the development of a clean hydrogen and energy transition cluster to unlock “sustainable economic growth and decarbonisation opportunities for Oman LNG and beyond”.

Importantly, the move will further strengthen Oman LNG’s bid to secure an extension in its mandate from the Omani government to operate beyond 2025, when its current 25-year concession expires. The Qalhat plant is emerging from a multi-million dollar, multi-year capacity restoration, debottlenecking and rejuvenation programme aimed at boosting efficiency and ensuring long-term sustainability.

Thursday’s agreement builds on a future vision for Oman LNG articulated by CEO Dr Hamad al Naamany (pictured) at the Green Hydrogen Summit Oman (GHSO) held in Muscat last December.

As major LNG consumers pledge to ditch fossil fuels in favour of low-carbon and even carbon-neutral fuels such as green hydrogen, Oman LNG is gearing up to bolster its value proposition in alignment with this global transition, said the CEO.

“The party that should feel the most challenged by this transition is perhaps the LNG industry, but at Oman LNG, we don’t see it that way – we actually see opportunity,” he stated.

That opportunity, he explained, can be harnessed if key stakeholders operating in the neighbourhood come together to establish an energy hub that exploits synergies among themselves to, on the one hand, add value to their operations, and on the other, advance the nation’s decarbonisation goals.

Located in the close vicinity of Oman LNG’s complex at Qalhat (Sur) are three other entities which, while currently operating in standalone mode, can potentially complement each other in the realisation of a low-carbon, hydrogen-based, energy hub, Dr Al Naamany pointed out.

“In a five km radius around Oman LNG are a large water plant, a massive power plant, a petrochemical project (Omifco) and the LNG plant. This is what we want to bring to the table in terms of how local coalitions can unlock opportunities,” he said.

“In effect, what we have a meta grid at Sur,” the CEO noted. “If we bring all of them into the discussion of leveraging the different sources of energy, creating the right margins, putting an arbitrage on the table, (instead of dealing one-to-one, but as a coalition), each one of us will be able to play in the energy market.”

For a coalition like this to work out, we need to bring about a hub that can create larger economies of scale, he added.

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