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Oman Guns for Superpower Status in Green Hydrogen

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Green hydrogen has seen a flood of investments and strategy announcements, but few aspiring producers are pursuing the technology quite as actively as Oman. The Mideast nation has adopted a two-track approach: the first spearheaded by state energy champion, OQ, which is bilaterally negotiating projects with international investors, and the second led by the energy ministry and state-owned Hydrogen Oman (Hydrom).

OQ is working toward four projects totaling almost 34 gigawatts of renewable power generation (see table) and a potential $40 billion in investment, Najla al-Jamali, Chief Executive of OQ’s Alternative Energy division, tells Energy Intelligence. The second track led by Hydrom and the energy ministry consists of a six-block auction of projects in bid rounds. The first, made up of two blocks in the Duqm area of east-central Oman, should be awarded at the end of the first quarter of next year, Hydrom's acting managing director, Firas al-Abduwani, told a forum in Oman last week. The second round — for another two to four blocks in southern Oman's Dhofar region — will launch in April, with bids due in October and awards expected by end-2023, al-Abduwani said.

Hydrom is targeting launch of a second auction in 2024 and production of 1 million tons per year by 2030. Eventually, Oman, which recently announced a 2050 net-zero target, is eyeing output of around 8 million tons/yr and investment of an eye-catching $140 billion by that date. The infrastructure would be tendered separately. “We were hoping to have a common infrastructure, the pipelines, how are they going to deliver the water," said al-Rizeiqi. Some three decarbonization hubs should emerge, built in part around hydrogen and centered around Oman’s industrial areas, said al-Jamali.

Leveraging Advantages

Oman benefits from both excellent solar and wind resources, with strong onshore wind speeds of 9-10 meters (30-33 feet) per second for projects on offer — the type of strength frequently seen offshore. “That should put us in the top five countries in terms of cost,” al-Jamali said. Further, by sharing infrastructure, projects should benefit from economies of scale to drive costs lower still.

OQ, emerging as the national champion of green hydrogen development, would hold a minimum 20% stake in the blocks on offer by Hydrom. Of the four projects now under discussion, it is probably “a race between Hyport Duqm and H2Oman” as to which one reaches a final investment decision (FID) first, notes al-Jamali. Hyport Duqm has first-mover advantages, but the partners in H2Oman are able to “cut and paste” many of the concepts they are implementing at their giant 4 GW Neom Green Energy project, currently under construction, al-Jamali explained. The project is a replica of the existing green hydrogen plant in the planned Saudi city of Neom.

OQ is targeting one or two FIDs in 2024. “Definitely we expect within 2027, 2028, we will be seeing first production,” she added. Its 25 GW Green Energy Oman project, if all goes as planned, would be implemented in phases, al-Jamali said. This is in part necessary to break the giant initiative into manageable bites — and partly to give options over usage. Currently, projects are geared toward export, but “probably towards the mid to the end of the next decade we will see a huge pickup in local demand,” she explained.

In all, "some three decarbonization hubs should emerge, built in part around hydrogen,” predicts al-Jamali. OQ has wider goals beyond green hydrogen, with a corporate decarbonization plan to be approved by around year's end slated to give more direction on implementation. Energy efficiency and renewables are to play a big part.

Green Hydrogen Projects From Oman's OQ
Project NameCapacity (GW)Partners
Hyport Duqm1.3Deme, Uniper
Green Energy Oman25.0Intercontinental Energy, EnerTech
H2Oman3.5Acwa Power, Air Products
Salalah H23.8Dutco, Linde, Marubeni

Topics:
Hydrogen, Renewable Electricity
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