MUSCAT: A consortium of international energy companies, led by Korean steel manufacturing giant POSCO, is tipped to secure a land block for the production of green hydrogen at Duqm in the southwest of the Sultanate of Oman.
According to Korean media reports, the consortium – formally known as the Korea Hydrogen Alliance – is due to sign agreements later this week formalizing the award of land for the upstream and downstream components of an integrated renewable hydrogen scheme, some elements of which will be housed in the Special Economic Zone (SEZ) at Duqm.
Besides POSCO, the alliance is understood to comprise Korean Southern power (a leading energy utility in South Korea), leading Korean contractor Samsung Engineering, French-based international energy giant Engie, and Thai energy conglomerate PTTEP.
This week’s anticipated agreements mark the culmination of a years’-long effort by POSCO and its partners to venture into Oman’s green hydrogen industry, which was recently referenced by the International Energy Agency (IEA) as world-scale in its vision.
As reported by the Observer at the time, POSCO first made public its ambitions for Oman at the Korea-Oman Green Hydrogen Strategic Forum 2022 held in Muscat last December. A top executive of the steelmaker announced that it was weighing investment in a mega green hydrogen project, alongside a green steel mill, at Duqm. The official also revealed that POSCO had assembled a heavyweight consortium to bid for available acreage offered up by the Omani government via the auction route.
In addition to producing green hydrogen to decarbonize its massive industrial assets distributed globally, POSCO also said it was examining the potential for establishing plants for the production of green hot briquetted iron (HBI) – the primary raw material for steel mills – in cost-competitive locations, including Duqm.
Boding well for the successful implementation of its renewable hydrogen project in Oman is the presence of international companies as consortium members, each with specialist capabilities to ensure delivery of all aspects of the project’s diverse scope.
POSCO, as lead partner, is expected to focus on the downstream green hydrogen plant, storage tanks and pipeline networks. Samsung will oversee the engineering, procurement and construction (EPC), among other project aspects. Engie is anticipated to focus on the upstream solar and wind-based renewable electricity generation components, with Korea Southern Power likely to oversee the operation of these facilities.
While a sizable part of the renewable hydrogen output from the alliance’s project is envisioned for export to POSCO’s global steel facilities, a portion could be potentially earmarked for a future green steel complex also planned in Duqm. If and when this complex materializes, it will add to a portfolio of green steel ventures slated to come up at the SEZ.
Oman is targeting the production of around 1 million tonnes of green hydrogen by 2030, partly for global export and the rest for local consumption in support of the country’s Net Zero goals.
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