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Oman sets up hydrogen infrastructure company

13 December 2023

Hydrogen Oman (Hydrom), a subsidiary of Energy Development Oman, is setting up an infrastructure company that will cater to the sultanate's emerging green hydrogen sector.

The infrastructure company's main stakeholders will be Oman Electricity & Transmission Company (OETC), Nama Water Services and OQGN, the owner and operator of Oman's natural gas transportation network.

The company is an important element in Oman's efforts to meet its goal of producing 1 million tonnes a year of green hydrogen by 2030.

The sultanate aims to be the world's sixth-largest producer, and the largest Middle East exporter, of green hydrogen by 2030.

The strategy is part of the country's net-zero plan, which also includes replacing natural gas with green hydrogen as fuel for its main industries.  

MEED previously reported that Hydrom plans to take an equity share in the planned green hydrogen projects in exchange for the supply of water, electricity and a pipeline network.

On 13 December, Hydrom said it expects to receive bids for the second round of the sultanate's land auction for integrated green hydrogen projects on 28 January 2024.

It expects to award the contracts to successful bidders by the second half of 2024, Abdulaziz al-Shidhani, Hydrom managing director, told the ongoing Oman Green Hydrogen Summit in Muscat.

"Hydrom offered three blocks for auction in the Dhofar region. When awarded, these will take the total green hydrogen production commitments close to our target of 1 million tonnes a year (t/y) of green hydrogen by 2030," the executive said.

On 12 December, Hydrom awarded a third hydrogen block to a consortium known as SalalaH2, in line with the sultanate's goal to develop green hydrogen hubs.

The SalalaH2 consortium comprises state-backed OQ Alternative Energy, Japan's Marubeni Corporation, UAE-based Dutco Overseas and South Korea's Samsung C&T.

According to Hydrom, the project is set to produce over 4GW of renewable energy for the production of green hydrogen, which will be processed further into green ammonia for local use, as well as for exports to international green ammonia markets.

The project is estimated to produce a target of over 1 million t/y of green ammonia, with an expected production of over 175,000 tonnes of green hydrogen.

The planned SalalaH2  is among several hydrogen projects being planned in Oman. Other projects include the 25GW Green Energy Oman, located in Al-Wusta Governorate, and two BP green hydrogen schemes in Duqm and Dhofar.

Belgium's Deme Group and India's Acme Group also lead separate consortiums planning to develop green hydrogen projects in the sultanate.

In June, Hydrom signed two land concession agreements worth a total of $20bn for developing green hydrogen projects in the sultanate. The contracts were awarded to the Danish-led Amnah consortium and a consortium led by South Korea's Posco and France's Engie.

None of the projects have reached financial investment decision so far, with pre-front-end engineering and design work and offtake negotiations still under way.

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Jennifer Aguinaldo

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