Oman signs two agreements for green hydrogen production

Muscat: Eng Salim bin Nasser Al Aufi, Minister of Energy and Minerals (MEM) and Chairman of the Board of Directors of Hydrom, a subsidiary of Energy Development Oman SAOC (EDO), today signed two new agreements awarding green hydrogen projects in Oman.

The agreements were signed with the winning bidders of the round 1 of Oman green hydrogen auction process during a special event organised by Hydrom under the supervision of MEM at Crowne Plaza OCEC, Madinat Al Irfan.

The event saw the attendance of senior officials from the public and private sectors.

During the event, the Round 2 public auction was launched, which will see new land blocks auctioned in the the Governorate of Dhofar.

Following the previous award of three projects earlier this month, Oman has in total awarded five large-scale green hydrogen projects, representing a total investment of more than USD 30 billion and a total production of 750 KTPA.

The total investment in the two newly awarded projects signed with a POSCO-ENGIE consortium and Hyport Duqum is expected to exceed USD 10 billion. The contracts are expected to yield a total production capacity of 250 KTPA from more than 6.5 GW of installed renewable energy capacity at the sites.

The first agreement was signed with the winner of the public auction process. It is a consortium POSCO-ENGIE and consisting of POSCO Holdings, MESCAT Middle East DMCC, Samsung Engineering Co. Ltd., Futuretech Energy Ventures, Korea East-West Power Co. Ltd. and Korea Southern Power Co. Ltd. The consortium is expected to produce more than 200 KTPA of green hydrogen by 2030, utilising over 5.2 GW of combined wind and solar energy to produce and export ammonia. The plant will be built in the Governorate of Al Wusta.

The second project was signed with a consortium Hyport Duqum consisting of the OQ Alternative Energy, and DEME Concessions NV, to produce green hydrogen. The consortium aims to produce more than 50 KTPA of green hydrogen by 2029 in the project’s first phase. The signing of this agreement follows the earlier signing of commercial term sheets in March 2023.

During the event, Hydrom also launched the second bid round of its green hydrogen auction process, which provides companies with the opportunity to submit investment proposals to develop large-scale green hydrogen projects in some of the most attractive locations of the Sultanate of Oman. In Round 2, Hydrom plans to award up to three (3) land blocks in the Dhofar by the end of the first quarter of 2024.

Companies interested in bidding can register through the Hydrom websitehttps://hydrom.om/. In parallel, Hydrom will finalise negotiations with companies with which it had signed commercial term sheets in March 2023, hoping to sign the full agreements before the end of 2023.

Commenting on the agreements, Eng. Salim bin Nasser Al Aufi stated, “We are pleased to witness the signings of these new agreements with such prestigious international companies. The fast-paced efforts behind the announcement of these new projects reflect Oman’s commitment to reinforce its leading position in the global green hydrogen sector in line with its energy transformation strategy.

He added, “We are also delighted with the announcement of the launch of round 2 of the public auction for green hydrogen projects. This aligns with our ambitious plans to establish Oman as one of the world’s largest exporters of green hydrogen by 2030. We possess valuable natural resources and geographical features that allow us to spearhead this promising sector and capitalise on its potential as the energy source of the future. 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.”

“We are delighted with Hydrom’s accomplishments during the Round 1 public auction process. We look forward to yet more remarkable milestones to come with Round 2 and at the same accelerated pace. Doing so will support EDO’s vision toward developing Oman’s energy sector and leading Oman’s sustainable energy future. Furthermore, we will continue to provide the necessary support to Hydrom to achieve its vision,” said Eng. Mazin Al Lamki, CEO of EDO.

Speaking on the achievements, Eng. Abdulaziz Al Shidhani, Managing Director of Hydrom, said, “We are proud of what we have accomplished so far towards developing the green hydrogen sector in the Sultanate of Oman. The signing of these agreements reflects Oman’s commitment towards stimulating the growth of its green hydrogen sector and cementing its leading position regionally and globally. Hydrom conducted round 1 of the auction in record time. Today, we also witness the launch of the Round 2 public auction for new green hydrogen blocks. These accelerated steps aimed at achieving the national objective of producing more than 1 MTPA of green hydrogen by 2030.”

In addition to the agreements signed today, Hydrom signed three other agreements earlier this month with the consortia of Amnah, Green Energy Oman (GEO) and BP Oman. The total investment is expected to exceed USD 20 billion. These contracts are expected to yield a total production capacity of half a million tonnes of green hydrogen per annum from more than 11.5 GW of installed renewable energy capacity at the three sites, covering 960 km2 in the Al Wusta Governorate.

Oman’s ambitious plan aims to produce more than 1 MTPA of green hydrogen by 2030 ramping up t 8 MTPA by 2050, with a cumulative investment value of USD 140 billion for the projects.