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Oman eyes 2027 hydrogen investment decisions

11 December 2024

 

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Oman is working with partners and potential end-users to reach financial investment decisions and start the construction works for its planned integrated green hydrogen projects.

"We expect construction works to start in early 2027… It is an optimistic timeline, but we are working hard with – and supporting – our partners, to help them sign offtake agreements and achieve financial investment decisions within this timeline," Salim Bin Nasser Al-Aufi, Oman’s Minister of Energy & Minerals and chairman of Hydrogen Oman (Hydrom), told the ongoing Green Hydrogen Investor Day in Muscat.

Al-Aufi said having end-users name a price for hydrogen will help Oman's nascent industry to work backwards, and advance the ongoing talks towards reaching financial investment decisions.

"Once we sign the first offtake agreement … that will set the ball rolling," the minister, who recently witnessed the signing of a memorandum of understanding with the Belgian Hydrogen Council for cooperation across the hydrogen value chain, told the 300 attendees at the event.

Hydrom is also exploring the supply of liquid hydrogen with the Port of Amsterdam.

Oman has earmarked 50,000 square-kilometres of land in two locations for green hydrogen projects. Hydrom signed several long-term project development agreements with multiple consortiums following its first two hydrogen auctions in 2023 and 2024.

It expects to conduct the third auction in 2025.

Five consortiums have won the land concessions agreements so far. These include teams led by Denmark's Copenhagen Infrastructure Partners, South Korea's Posco and France's Engie, Japan's Marubeni and France's EDF, as well as a team comprising London-based Actis and Australia's Fortescue. 

Oman has also signed so-called legacy projects with other teams led by Belgium's Deme, BP and Intercontinental Energy.

A limited gas supply and network strongly incentivises Oman to build a green hydrogen-centric downstream sector that will provide feedstock to domestic industrial plants and generate derivatives for the local and export markets.

Stakeholders have implemented a strategy, including setting up an infrastructure company catering to these projects. The target is to generate 1.4 million tonnes a year (t/y) of green hydrogen by 2030 and up to 8.5 million t/y by 2040.

The 2030 target will require up to $50bn of investment, 18GW of electrolyser capacity and 35GW of renewable energy capacity.

The blueprint envisages a complete green hydrogen ecosystem, from the production of renewable energy and its distribution to electrolysis plants, and from hydrogen derivatives conversion plants to storage and export terminals.

The existing relationships between Omani ports and European stakeholders, and the ports' growing alliances with other countries, could help to seal future offtake agreements for the planned facilities.

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Jennifer Aguinaldo

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