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Salalah2 hydrogen team reviews advisory bids

14 March 2024

An international consortium developing an integrated green hydrogen project in Oman is reviewing proposals it has received for the financial, legal and technical advisory roles for the project.

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

Hydrogen Oman (Hydrom), a subsidiary of Energy Development Oman, awarded a green hydrogen block to the SalalaH2 consortium in December.

The team signed the term sheets for the project in March 2023, over a year since the initial project was announced.

"Asian and European offtakers are onboard and have expressed their commitment to support the project," said a source familiar with the scheme, without specifying the companies that intend to procure the plant's output long-term.

However, it is understood that official agreements between the producing consortium and the potential offtaker or offtakers have not yet been signed.

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 integrated facility aims to produce over 1 million t/y of green ammonia, with an expected production of over 175,000 tonnes of green hydrogen.

Oman aims to produce up to 1 million tonnes a year of green hydrogen by 2030.

In October 2021, MEED reported that the consortium was conducting studies that would provide the basis for an investment decision.

At the time, various offtake streams were being explored and coordinated with the OQ ammonia plant’s current offtaker.

These included the “co-firing needs of coal-fired power plants in Asia, the renewable feedstock needs of fertiliser plants in Europe, and the decarbonisation needs of the global shipping industry”.

Related reads:

Global trend

There were significant developments for the global hydrogen market in the fourth quarter of 2023, with Germany leading in new low-carbon hydrogen plant announcements, according to GlobalData.

The global total of active and pipeline capacity of low-carbon hydrogen projects has now reached 201 million metric tonnes per annum (mtpa). By 2030, the capacity is expected to reach 130 mtpa in a high-case scenario and 81 mtpa in a low-case scenario.

Canada continues to lead in terms of capacity, with over 90 mtpa across 70 different hydrogen hubs. However, the hydrogen deal count and value in the fourth quarter of 2023 were lower than in previous quarters, reflecting a challenging macroeconomic environment. Despite these challenges, the hydrogen market continues to grow, with increasing attention on this technology as a key player in the energy transition.

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Jennifer Aguinaldo

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