Oman sees signing of two new green hydrogen project agreements

Hydrom, a subsidiary of Energy Development Oman SAOC (EDO), has entered two new agreements awarding green hydrogen projects in Oman.

The agreements were signed with the winning bidders of round 1 of the Oman green hydrogen auction process during an event organised by Hydrom. This auction process provides companies with the opportunity to submit investment proposals to develop large-scale green hydrogen projects in Oman.

The first agreement was signed with the POSCO-ENGIE consortium, consisting of POSCO Holdings, MESCAT Middle East DMCC, Samsung Engineering, Futuretech Energy Ventures, Korea East-West Power (EWP) and Korea Southern Power (KOSPO).

According to ENGIE, the consortium will mobilize Oman’s renewable energy resources through the development of a green ammonia project with a capacity of 1.2 million tons per year.

The project is expected to include up to approximately 5 GW of new wind and solar capacity, a battery energy storage system (BESS) and a renewable hydrogen plant with a capacity of up to 200 ktpa. ENGIE said the hydrogen will be transported by a hydrogen pipeline to be built till the port of Duqm where it will feed the ammonia production plant.

The project contract will last for a period of 47 years, broken down into a seven-year development and construction phase followed by a 40-year operational period, ENGIE said, adding that the construction is projected to begin in 2027, with the first shipment of green ammonia to Korea planned for the second half of 2030.

The second project agreement was signed with the Hyport Duqm consortium, consisting of the OQ Alternative Energy and DEME Concessions. The signing of this agreement follows the earlier signing of commercial term sheets in March 2023.

DEME said the Hyport Duqm is being developed in an area designed to produce wind power and solar energy with a combined renewable power capacity of around 1.3 GW in Phase 1 and potentially over 2.7 GW when Phase 2 is realized. The first phase of the project is set to produce approximately 330,000 tons of green ammonia and the second more than 650,000 tons.

The total investment in the two newly awarded projects is expected to exceed $10 billion.

Following the previous award of three projects, Oman has in total awarded five large-scale green hydrogen projects, representing a total investment of more than $30 billion and a total production of 750 ktpa. The three previous projects were awarded to the consortia of Amnah, Green Energy Oman (GEO) and BP Oman.

• Oman signs three green hydrogen project agreements in ‘a significant milestone’

To note, Hydrom has also launched the second bid round of its green hydrogen auction process, in which it plans to award up to three land blocks in the Dhofar area by the end of the first quarter of 2024.

Commenting on the newly signed agreements, Salim bin Nasser Al Aufi, Minister of Energy and Minerals (MEM) and Chairman of the Board of Directors of Hydrom, stated: “The green hydrogen sector is one of the key enablers towards achieving the strategic goals outlined in Oman Vision 2040 and the country’s target of net-zero carbon emissions by 2050.”

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