Oman rarely attracts much attention from the International Energy Agency (IEA) but it recently highlighted plans to transform the northern port and freezone at Sohar into a green hydrogen hub as an exemplary model which could be applied elsewhere.

Plans for the hydrogen hub, part owned by Port of Rotterdam and with investment from international companies including Shell and TotalEnergies, were unveiled by the Sohar Port and Freezone (SPFZ) management company in November. Notably, the hub will be geared towards local consumption rather than export markets, as is the case with Hong Kong-based InterContinental Energy’s plan to develop a 25GW green hydrogen complex near the port and economic centre at Duqm, on Oman’s central coast.

The Sohar concept envisages storing green hydrogen, produced using solar power at the site, for delivery on-demand by pipeline or trailer to tenants. Germany’s HydrogenRise signed an agreement in January to create a local joint venture to support the fuel’s production and marketing both as “an energy carrier and as a starting material for various industrial and petrochemical applications”, with a special focus on Sohar.

Oman is a natural candidate for green hydrogen development given high solar irradiation levels and its long track record in sourcing international limited-recourse project financing.

Green steel

A white paper by SPFZ chief executive Mark Geilenkirchen setting out the rationale for the hub singled-out the potential to use hydrogen in steelmaking.

“Green steel could be built on Oman’s unique combination of competitive iron ore and renewable energy resources, matched with emerging hydrogen production,” Geilenkirchen says.  Salim al-Huthaili, head of alternative energy at OQ, a giant government holding company with stakes in various anchor projects at Sohar, also spoke in mid-June about Muscat’s ambitions to move into green steel and cement manufacture.

"Green steel could be built on Oman’s unique combination of competitive iron ore and renewable energy resources, matched with emerging hydrogen production" – Geilenkirchen, SPFZ

The site’s various industrial clusters have become home to a host of international firms, in particular in the steel and petrochemicals sectors, while the port gains from its location outside the overcrowded and frequently-tense Strait of Hormuz.

The advantage of Port of Rotterdam’s global reach was proven in late June in an agreement between SPFZ and the Dutch company’s affiliate Pecem Complex, the operator of an industrial port in north-east Brazil, to co-operate in areas including green hydrogen development. Brazilian mining and metals giant Vale is a longstanding anchor tenant at Sohar, operating a 9mn t/yr iron ore pelletising plant.

The involvement of oil majors Shell and TotalEnergies, long-time investors in the sultanate’s hydrocarbons industry, in Sohar’s green push was also noted by the IEA as an asset. In January, Shell commissioned a 25MW solar plant in the freezone to power the operations of a local producer of ferro-chrome, and plans to install additional 10-40MW facilities totalling up to 300MW as required by other industries. TotalEnergies is building a 1mn t/yr LNG bunkering plant at the port,  with the developer indicating the intention in March to use 100pc solar power in the liquefaction process.

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Author: Clare Dunkley