Friday, February 23, 2024 | Sha'ban 12, 1445 H
clear sky
weather
OMAN
20°C / 20°C
EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Epicentre of Oman’s emerging green hydrogen economy

Anchored by a world-class seaport abutting international shipping lanes, Duqm – with its optimal conditions for renewable solar and wind power generation – is unmatched in its value proposition as a destination for large-scale green hydrogen production. Predictably, this desert expanse has already pulled in a staggering $38 billion in investments to date, that will power the growth of Oman’s future green economy
No Image
minus
plus

Once conceived as a hub for predominantly hydrocarbon-based petrochemicals, industrial and mining related industries, Duqm Special Economic Zone (SEZAD) is rapidly making way for mega investments that are more aligned with Oman’s sustainability goals.


In the hinterland of the SEZ are set to emerge vast farms paved with millions of solar panels and tens of thousands of wind turbines that will provide multi-gigawatts of renewable electricity to produce zero-carbon green hydrogen. While the bulk of this clean energy resource is earmarked for export, part of this output will power a new generation of green industries, including steel, aluminium, cement, white goods and even green chemicals.


Hydrogen Oman (Hydrom), the orchestrator and master-planner of Oman’s green hydrogen industry, has already found takers for the massive land blocks it has carved out from around Al Wusta Governorate for the first round of green hydrogen projects. An auction process launched by Hydrom in November 2022 has already resulted in the award of the first two blocks.


To date, Hydrom has signed agreements with five different sets of developers. They include the winner of the first block — the Amnah Consortium — comprising Copenhagen Infrastructure Partners (CIP), Blue Power Partners (BPP), and Al Khadra Company (part of Hind Bahwan Group). Agreements were also signed with the winner of the second block – the POSCO-Engie Consortium – comprising POSCO Holdings, Engie, MESCAT Middle East DMCC, Samsung Engineering Co Ltd, Futuretech Energy Ventures, Korea East-West Power Co. Ltd, and Korea Southern Power Co. Ltd.


Three other projects that were initiated before the launch of Hydrom — the so-called ‘Legacy Initiatives’ — were also formalised. They were granted an exemption from participating in the auction process. Agreements were signed with all three Legacy Initiatives: Green Energy Oman (GEO), led by Shell New Energies, OQ, Intercontinental Energy and EnerTech; BP; and Hyport Duqm (comprising DEME Group and OQ). All five agreements, for the most part, are identical in their broad scope and mandate. (A sixth agreement signed more recently, in December 2023, concerns the SalalaH2 project, which is planned for implementation in Dhofar Governorate).


The five firm green hydrogen projects already being prepped for implementation in Duqm will produce an aggregate of 750,000 tonnes per annum of green hydrogen. Oman’s goal is to achieve the production of between 1 million — 1.5 million tonnes of green hydrogen annually by 2030. This equates into roughly 8 – 15 GW of electrolyser capacity and 16 – 30 GW of renewable power. Investment required to develop 1 GW of electrolyser and 1 GW of renewable capacity is an estimated $1 billion, underscoring the magnitude of these projects.


Integrated end-to-end, these projects encompass the full hydrogen value chain: Renewables generation, Hydrogen production, Hydrogen derivatives conversion (into ammonia, methanol, sustainable aviation fuels, and so on), and Offtake. Opportunities also abound for domestic utilisation of green hydrogen in, for example, green steel production.


Hydrom is also overseeing the development of common infrastructure, encompassing the production and transmission of water to produce green hydrogen, the transmission of renewable electrons, and the transportation of green hydrogen from the land blocks to the downstream areas in the Duqm SEZ. This infrastructure is being initiated for implementation in collaboration with the ‘national champions’ — the national utility companies — such as Marafiq, Nama Water Services, OETC, Asyad Group and so on. At the downstream end, green hydrogen production is expected to catalyse investments in an array of industrial ventures. Hydrom, along with the Public Authority for Special Economic Zones and Free Zones (OPAZ) see opportunities for using green hydrogen or clean hydrogen in refining operations, steel manufacturing, and in the production of fuels for shipping, as well as sustainable chemicals. Hydrogen can also be used to produce a wide range of derivatives and fuels as well, including e-fuels or synthetic fuels, such as sustainable aviation fuels.


Downstream opportunities prioritised for hydrogen use will include low-carbon fuels for shipping, green steel manufacturing and the production of ammonia for export.


Already there are pledges by some developers to earmark part of their output for local consumption. For example, Amnah, the multinational consortium that won Oman’s first land block (Z1-01), says its green hydrogen will be utilised to support the production of either green steel or intermediate low-carbon commodities, such as Hot Briquetted Iron (HBI) and Direct Reduced (DR) iron. Amnah expects to invest around $6 – 7 billion in a major scheme targeting an output of 210,000 tonnes of green hydrogen in the first phase of its development.


SHARE ARTICLE
arrow up
home icon