MUSCAT: The Green Energy Oman (GEO) project — one of the Sultanate of Oman’s flagship green hydrogen and ammonia initiatives — remains firmly on course, with project partner InterContinental Energy (ICE) expressing confidence that the venture will be able to supply competitively priced green ammonia to European markets in the early 2030s while driving production costs down substantially over the following decade.
In an interview with Profercy, a leading UK-based provider of market intelligence on the global fertiliser sector, Alex Tancock, Chief Executive Officer of Singapore-headquartered InterContinental Energy, said the Green Energy Oman project is well positioned to benefit from growing European demand for low-carbon ammonia.
The project is being developed by a consortium comprising energy giant Shell (as lead operating partner with a 35% stake), OQ Alternative Energy, InterContinental Energy (ICE), EnerTech of Kuwait and Golden Wellspring Wealth for Trading LLC. At full build-out, GEO is expected to produce approximately 1.8 million tonnes of green hydrogen per year.
According to Tancock, the project's first phase is expected to produce around 200,000 tonnes per year, much of which is likely to be shipped to Europe.
"Shell as the lead operator understands the regulations and believes that the price we can generate at is competitive and there is a big enough market", he said, adding that subsequent expansion phases would deliver progressively lower production costs.
ICE believes declining renewable energy costs, combined with continued technological improvements, will enable green ammonia production costs to fall sharply over the next 15 years. The company forecasts free-on-board (FOB) prices of around $600 per tonne in the early 2030s, declining to approximately $500 per tonne by the middle of the decade before reaching about $400 per tonne in the early 2040s.
Tancock said these projections represent a dramatic improvement from only a few years ago, when many developers struggled to produce green ammonia for less than $1,000 per tonne.
He attributed ICE's confidence to a long-term strategy centred on developing large-scale projects in jurisdictions offering abundant wind and solar resources, stable investment environments and the ability to operate independently of national electricity grids.
"When we set up the business 12 years ago, our view was that with wind and solar prices dropping, it would become feasible to develop large projects based on those renewable resources", he said.
Beyond Europe's decarbonisation agenda, Tancock believes recent geopolitical disruptions have strengthened the business case for projects such as GEO by encouraging governments and industrial buyers to diversify supply chains and reduce dependence on traditional energy exporters.
Europe, in particular, is expected to remain the principal market for Omani green ammonia, supported by tightening climate regulations, including the European Union's Carbon Border Adjustment Mechanism (CBAM), which is expected to increase demand for low-carbon industrial feedstocks.
He also pointed to the emergence of ammonia as a marine fuel as another significant source of future demand, with ammonia bunkering expected to become an important component of global shipping decarbonisation.
Looking ahead, Tancock expects projects such as GEO to become major suppliers to both the fertiliser industry and emerging clean energy markets during the 2030s and 2040s.
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