Oman hydrogen strategy aligned to market shifts

MUSCAT, NOV 30

Eng Salim bin Nasser al Aufi, Minister of Energy and Minerals, outlined progress in the development of Oman’s green hydrogen sector, while also offering his perspective on evolving market dynamics surrounding the domestic and global low carbon industry.

Delivering the keynote address at the Energy Executive Circle — held as part of the Green Hydrogen Summit Oman (GHSO) 2025 — Eng Al Aufi noted that the Sultanate of Oman is making steady progress on key renewable and hydrogen initiatives. He singled out four entities for praise for their decisive roles in advancing green energy development in Oman and internationally. The list includes OQ Alternative Energy, which had recently received its first shipments of wind turbines for its wind farm projects in Oman — shipments that also provided valuable logistical experience for future large-scale mobilisations, he said.

Kawasaki Heavy Industries was cited for starting development of a major liquid hydrogen terminal in Japan, while India’s ACME Group was lauding for advancing the first green ammonia project in the Sultanate of Oman, the output of which will be lifted by a European offtaker on ammonia-powered vessels. Additionally, Al Aufi acknowledged the European Union’s strong role in accelerating partnerships and hydrogen framework development with Oman.

The Minister added that Oman’s hydrogen strategy is intentionally flexible to reflect changing market conditions. The next land auction round focuses on smaller parcels aligned with current market readiness, while developers are allowed to phase projects, adjust final product molecules and choose between export and domestic pathways.

Pricing remains the main challenge, though green hydrogen costs have improved to around $3 per kilogramme and are expected to decline further, he noted. With strong solar and wind resources; and land and frameworks already prepared, Oman is positioned to scale quickly as global demand increases — particularly as the sector is expected to undergo significant shifts in the next five to ten years.

Earlier, Dr Abdullah al Abri, Vice President of Sustainability at SOHAR Port and Freezone, opened the session with a presentation on the global hydrogen sector.

Dr Al Abri said: “The global hydrogen economy is entering a decisive chapter. Today, demand is approaching 100 million tonnes, yet projections show it may multiply several times by 2050. This creates a historic opportunity for countries like Oman, where abundant low-cost renewables provide a strong foundation for competitive green hydrogen production. While electrification continues to expand, clean molecules such as hydrogen will remain essential for hard-to-abate sectors including steel, chemicals, shipping and aviation”.

He added that the industry is shifting from ambition to disciplined execution, focusing on bankable projects, credible offtake structures and stable investment frameworks.

“Oman is moving from a resource-based economy to an integrated industrial platform”, he affirmed, pointing to major infrastructure developments in Suhar, Al Duqm, Salalah and Sur. “These hubs will connect today’s industries with future producers of green ammonia and low-carbon fuels, enabling long-term industrial competitiveness”.

He noted further that the forum serves as an important platform to align capital, policy and technology. “It allows us to translate insights into practical, disciplined steps that accelerate Oman’s emergence as a global hub for clean molecules”, he emphasised.