BP to acquire 49% stake in Hyport Duqm
31 July 2024
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UK-headquartered energy giant BP will acquire a 49% stake in Hyport Coordination Company (Hyport Duqm), one of Oman’s first green hydrogen development companies.
BP said in its first-half 2024 financial report that it signed an agreement on 13 June with Oman’s state-backed energy company OQ and Belgium’s Dredging, Environmental & Marine Engineering (Deme) to acquire “a 49% stake and operatorship in the Hyport green hydrogen project in Duqm, Oman”.
The stake purchase is subject to customary regulatory approvals.
It is unclear how the deal with the Deme-led consortium will affect BP’s two planned legacy hydrogen projects in Duqm and Dhohar, which were announced last year.
Having reached the pre-front-end engineering and design (feed) stage, Hyport Duqm is at the most advanced stage of development compared with the rest of the planned multibillion-dollar integrated green hydrogen and ammonia production facility projects in Oman.
In September last year, it invited companies to bid for a contract to provide project management consultancy services for its planned green hydrogen project in Duqm.
The scope of work includes design review and project management during the feed stage, as well as procurement technical support.
In June last year, the consortium signed a second land reservation agreement for a green hydrogen and ammonia production plant with the Public Authority for Special Economic Zones and Free Zones (Opaz) in Duqm.
The project will include a solar and wind park with a total installed capacity of about 1.3GW, a dedicated, high-voltage green electricity transmission line, and a utility-scale electrolysis and ammonia conversion plant.
Hydrogen will be produced from desalinated water and converted into green ammonia, which will be stored and shipped from the Port of Duqm to target export markets.
This entails a green hydrogen and green ammonia production facility with a 500MW electrolysis capacity on a site of 793,000 square metres.
The project’s first phase aims to produce around 57,000 tonnes a year of green hydrogen by 2029.
The renewable energy farms will be located in the Special Economic Zone at Duqm’s (Sezad) renewable energy area, where a site of 150 square kilometres has been allocated.
Hyport signed its first land reservation agreement with Opaz in 2021 for the green hydrogen and ammonia production facility it plans to set up in Sezad.
The agreement preceded the project’s early engineering work and site data collection.
In July 2021, MEED reported that the joint venture had signed a cooperation agreement with German energy firm Uniper to provide engineering services and negotiate an exclusive offtake agreement for the green ammonia produced at the planned facility.
Related read: Awards buoy Oman’s green hydrogen strategy
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A local media report recently cited EDF Middle East chief executive Luc Koechlin saying the company is in talks with the municipality to set up a 5GW PSH plant, which is likely the biggest in the world.
The project is envisaged to be capable of storing energy for up to 12 hours. It is a country-level initiative aimed at balancing electricity supply in the UAE, where clean energy plays an increasingly significant role in the energy mix.
“Most of the solar farm development is happening in Abu Dhabi and Dubai but for the storage and especially pumped storage, you need mountains,” Koechlin said.
He added that connecting the power grids will help effectively manage energy generated from solar, nuclear and large-scale storage systems.
The UAE and GCC region's first pumped-storage hydroelectric power plant in Hatta is 94.15% complete, and generator installations are under way in preparation for a trial operation in the first quarter of 2025, state utility Dubai Electricity & Water Authority (Dewa) said in November.
The Hatta plant's upper dam, which includes a 72-metre-high main wall and a 37-metre-high side dam, has also been filled. The plant will have a production capacity of 250MW, a storage capacity of 1,500 megawatt-hours and a lifespan of up to 80 years.
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Oman seeks interest for 2.4GW thermal project
6 December 2024
Oman's Nama Power and Water Procurement Company (Nama PWP) has invited companies to express interest in a competitive tender for the development of combined-cycle gas turbine (CCGT) plants with a total planned capacity of 2,400MW.
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The state offtaker said it expects to issue the tender in the first quarter (Q1) of 2025 and award the BOO contract by Q4 of 2025.
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US/India-based Synergy Consulting is the client's financial adviser.
The new project presents a u-turn to a previous decision that Oman will not build any new gas-fired power generation plants, which local media reported in 2022.
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It was said that Oman will no longer float any tenders other than for solar or wind power generation plants "at this time".
IWPP/IPP extensions
In May, Nama PWP announced the award of renewed contracts for four gas-fired independent power and water projects in the sultanate.
The agreements collectively secure over 1,500MW of electricity and 200,000 cubic metres a day (cm/d) of desalinated water for up to nine years.
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Neom hydrogen project reaches 60% completion rate
6 December 2024
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Construction work on the $8.4bn Neom green hydrogen project in Saudi Arabia has reached a 60% completion rate.
According to a source close to the project, work is ongoing across all three sites, including the wind, solar and green hydrogen production facilities.
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Former Neom Green Hydrogen Company (NGHC) CEO, David Edmondson, told MEED in November last year that “the first ammonia production is expected sometime between mid to late summer of 2026”.
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In addition to being the project’s co-owner, main engineering, procurement and construction (EPC) contractor and system integrator, Air Products is also the exclusive offtaker for over 30 years for the green ammonia produced at the facility.
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The plant will produce up to 600 tonnes of hydrogen daily, which will be converted into about 1.2 million tonnes of ammonia a year.
Construction works have been in full swing for the various elements of the project, after it reached financial close in May 2023.
India’s Larsen & Toubro (L&T) is the EPC contractor for the project’s renewable energy and transmission and distribution package.
L&T’s EPC scope includes a 2,200MW solar plant, a 1,370MW wind farm, a 400MW battery energy storage system and a transmission network extending 190km.
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Photo credit: NGHC
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Algeria cancels $1.3bn refinery contract and makes new award
6 December 2024
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Algerian state energy producer Sonatrach has cancelled its $1.3bn contract with South Korea’s Samsung Engineering for the planned $3.7bn Hassi Messaoud refinery project in Algeria, and replaced it with China’s Sinopec.
Samsung Engineering confirmed the contract’s cancellation on 28 November without specifying the reason.
Sonatrach officially signed the main contract award for the Hassi Messaoud refinery with the consortium of Samsung Engineering and Tecnicas Reunidas in January 2020.
Since then, little progress has been made on the project due to various factors, including the Covid-19 pandemic, which caused significant disruption to the project.
Spanish newspaper CincoDias reported that China’s Sinopec has replaced Samsung Engineering on the project.
Spain’s Tecnicas Reunidas is still participating in the project, according to industry sources.
In August this year, MEED revealed that only some preliminary engineering work had been finished and the project was about 5% complete.
In 2023, Sonatrach restarted talks with the consortium that won the contract to execute the Hassi Messaoud refinery project to get it moving, but they were unsuccessful.
Talks were reinstated in 2024, but these were also unsuccessful.
In August, MEED revealed that Samsung Engineering and Tecnicas Reunidas had asked for amendments to the original deal due to the significant increase in building material prices since the original contracts were signed, which implies the project cannot be completed with the same budget.
At the time, a source said that the consortium wanted more money to account for inflation since 2020, when the contracts were signed.
In July this year, the vice-president of refining and petrochemicals at Sonatrach, Slimane Slimani, said that his company aimed to bring the facility online before the end of 2027.
Industry sources say this target will be difficult to achieve given the extensive delays and disruption that the project has suffered.
Speaking on Radio Algerienne Chaine 3 in July, Slimani said that Sonatrach had officially revived the project, and its execution was aligned with the company’s broader strategy for the country’s downstream sector.
He said the refinery project is estimated to produce an extra 2.7 million tonnes of diesel fuel and 1.2 million tonnes of gasoline a year.
When Sonatrach first announced the project, it was part of Algeria’s $14bn strategic downstream capacity expansion programme, which included the construction of five new refineries.
Under the terms of the original contracts signed in 2020, contractors were required to execute the works on a lump-sum turn-key basis.
Prior to the delays, the work was expected to be completed in about 52 months and conclude in the first quarter of 2025.
The scope of work includes building process and utility units; a crude distillation unit/vacuum distillation unit; a continuous catalytic reforming unit; an isomerisation, naphtha hydro-treating unit; a hydro desulphurisation unit; and a hydrocracker unit, as well as utility systems.
In recent years, Algeria’s $14bn strategic downstream capacity expansion programme has been scaled down and delayed.
Initially, Sonatrach awarded the front-end engineering and design contract for three refineries to London-based Amec Foster Wheeler in 2016.
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Budget issues in 2017 put the Biskra refinery on hold so that Sonatrach could focus on moving forward with the Hassi Messaoud and Tiaret refineries.
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EDF-led team signs 1.4GW Saudi solar deals
5 December 2024
France's EDF Renewables and its consortium partner, China’s SPIC Huanghe Hydropower Development Company, have signed the power-purchase agreements (PPAs) with the principal buyer, Saudi Power Procurement Company (SPPC), for two solar photovoltaic (PV) projects with a total combined capacity of 1,400MW in Saudi Arabia.
EDF Renewables and SPIC successfully bid for the contracts to develop and operate the 1,000MW Al-Masaa solar independent power producer (IPP) and the 400MW Al-Henakiyah 2 solar IPP projects earlier this year.
The projects are estimated to cost $850m.
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In addition to Macron, Saudi Energy Minister Prince Abdulaziz bin Salman Al-Saud, Saudi Commerce Minister Majid bin Abdullah Al-Qasabi, and French Minister of Ecological Transition, Energy, Climate and Risk Prevention, Agnes Pannier-Runacher witnessed the signing of the PPAs.
EDF said once operational, both projects are expected to power more than 240,000 homes a year and displace more than 2.7 million tons of carbon dioxide annually.
The Al-Masaa and Al-Henakiyah solar IPPs were tendered earlier this year under the fifth procurement round of Saudi Arabia's National Renewable Energy Programme (NREP).
Photo credit: EDF
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