Oman has moved slowly into the clean energy arena even by the standards of the hydrocarbons-rich region—surprisingly so, since it lacks the bountiful oil and gas endowment of its neighbours. However, the absorption of government-led Petroleum Development Oman—producer of some two-thirds of the sultanate’s crude and around three-quarters of its revenues—into newly-created Energy Development Oman in December, with a remit to spearhead the energy transition, signalled a new seriousness of intent.

Plans are afoot for green hydrogen projects at Sohar and Duqm, the oldest and newest of the country’s industrial hubs. And in late January, a global giant was co-opted into the drive to enter the burgeoning industry, as Japan’s Sumitomo Corporation agreed to conduct a feasibility study into an innovative blue hydrogen pilot at oil and gas fields in the northwest.

That a Japanese firm should be the first major international player to join the fray was not unexpected. The energy-poor Asian nation is at the forefront of global and regional hydrogen development—receiving Saudi Arabia’s first-ever blue ammonia cargo in September and tying-up with the freshly-formed ‘Abu Dhabi Hydrogen Alliance’ in mid-January—and has long been a major buyer of Omani oil and gas.

That a Japanese firm should be the first major international player to join the fray was not unexpected

By contrast, its chosen partner—seven-year-old exploration and production minnow ARA Petroleum—is hardly a household name but is owned by the Zubair Corporation, one of Oman’s oldest, largest and best-connected family conglomerates. Their memorandum of understanding covers a small-scale, self-contained hydrogen production and supply project at the Omani firm’s operations, some 250km west of Muscat. Steam-reforming technology will be used to convert associated gas pumped-out during oil production—currently flared—into 300-400t/yr of hydrogen for use in fuel-cell vehicles, with the waste carbon dioxide to be captured for deployment in local industries.

Further decarbonising the entire venture, the partners plan to build a 20MW solar plant to power both the hydrogen production process and other activities at the site. Should the scheme proceed, completion is scheduled for 2023.

Sumitomo described the project as a test for potential roll-out elsewhere in Oman as well as internationally. It would likely find a receptive audience in Muscat. The sultanate needs to make up clean energy ground rapidly to contain carbon emissions at 88.7mn t in 2030, as per its Paris Agreement target—only 2mn t higher than in 2019 and despite industrial expansion forming a key plank in its long-term economic development strategy.

Going for green

In hydrogen, as in solar and wind, the catch-up has begun. In December, Belgium’s DEME and government downstream energy company OQ launched the engineering and design phase of a planned green hydrogen plant at Duqm, intended to decarbonise the fledgling port and industrial hub (co-managed by DEME’s compatriot, Port of Antwerp) while allowing exports of the fuel and its derivatives (primarily ammonia)—signalling a positive conclusion to the feasibility studies initiated eight months earlier.

Electrolyser capacity of 250-500MW is being discussed for the first phase. At the northern city of Sohar, the sultanate’s historic heavy industry engine, the operator of the port and free zone—a government joint venture with Port of Rotterdam—announced plans in October for a green hydrogen plant, the output of which would primarily be used to decarbonise local industries such as steel rather than for export, without providing further detail. Germany’s Hydrogen Rise is providing advice.

While willing to kick-start such ventures, Muscat is facing an acute fiscal squeeze predating but exacerbated by last year’s slump in oil prices—and will require the private sector to take the lead in developing the wider hydrogen industry over the longer-term. It may look to its traditional IOC partners, likewise committed to decarbonising their operations, to play a part.

Shell and BP, both of which have recently announced major hydrogen expansion plans and which are the sultanate’s leading foreign investors in oil and gas, respectively, would be obvious candidates. Shell’s renewables subsidiary Qabas commissioned a 25MW solar plant at Sohar in mid-January. However, government support within a relatively benign foreign investment environment, coupled with plentiful reserves of both sunshine and waste gas, are likely to prove tempting to many others looking to move into the in-vogue industry.