Oman inks two hydrogen deals for USD 10bn, opens 2nd round of tender

Oman on Wednesday signed two more deals for the development of green hydrogen projects in the Duqm area with an estimated investment value of about USD 10 billion (EUR 9.15bn) and launched the second round of the ongoing auction.

A consortium led by South Korea's POSCO and French energy major Engie SA inked the first agreement which focuses on harnessing the power of about 5 GW of wind and solar energy in Al Wusta Governorate to produce 200,000-220,000 tonnes of hydrogen. This clean energy production is primarily intended for export in the form of ammonia. Discussions regarding the potential utilisation of ammonia within the domestic market will take place at a later stage.

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Other participants in the consortium include Samsung Engineering, Thailand's PTTEP, Korea East-West Power Co (EWP) and Korea Southern Power Co (KOSPO).

Preliminary calculations indicate that the estimated investment for this project ranges between USD 7 billion and USD 8 billion.

The second deal involves Hyport Duqm consortium which consists of Belgium's DEME and Oman's energy company OQ. The signed agreement concerns the first phase of a project that is being prepared for some time and aims to produce about 50,000 tonnes of hydrogen and ammonia in the Duqm free zone. The second phase of the project will probably be signed at a later stage, energy minister Salim Al Aufi said during the signing ceremony.

The signing of the project development agreements with the two consortiums marked the completion of the first round of the auction.

Earlier in June, Hydrom awarded three projects for green hydrogen production in the Duqm area as part of this round. The projects with an estimated investment cost of about USD 20 billion will be built on an area of 960 square kilometres (370 square miles).

The sultanate, which could become the sixth-largest green hydrogen exporter in the world by 2030, also kicked off the second round of the auction, inviting developers to compete for three plots in the Dhofar area in the south. The qualification process will run for two - two and a half months and the round will be closed by the end of the first quarter of 2024, Al Aufi said.

The land plots awarded for hydrogen production in the first round of the tender will ensure that Oman will reach its goal to produce at least 1 million tonnes of green hydrogen by the end of this decade.