Oman has moved with uncharacteristic speed over the past 18 months to join the international drive into hydrogen, securing foreign partners for a series of largely green hydrogen projects.

Most of the developments are planned for the new port and economic zone at Duqm, on the east-central coast—a natural choice, given its geographical position for exports and concentration of downstream industries ripe for decarbonisation and government support.

Projects have also been announced at Sohar, the historic port and industrial city in the north—where abatement needs coupled with bunkering and export opportunities are a selling point—and Salalah, a smaller industrial centre in the far south.

However, projects have so far emerged in a seemingly ad hoc fashion, with the authorities responding enthusiastically to investor interest while they simultaneously develop an overarching long-term strategy. A 20-year strategy published in December calls for the sultanate to have installed 30GW of electrolyser capacity by 2040, enabled by $34bn of foreign direct investment.

A study has been launched into the creation of a clean fuel cluster at Sur, a gas-based export hub in the northeast, along with proposals for a possible auction of hydrogen ‘concessions’—sites designated for use by the industry—to private investors.

30GW – Oman’s 2040 target for installed electrolyser capacity

Sur, 150mk southeast of Muscat, is home to Oman’s LNG industry, the second largest in the Mideast Gulf with a capacity of around 11.4mn t/yr. It also houses a 3,500t/d ammonia and urea plant owned by Oman India Fertiliser Company, a joint venture (JV) between government energy company OQ and two Indian firms, as well as a 2GW gas-fired power plant.

The “prefeasibility study” into the potential creation of “hydrogen and energy transition clusters” at the city was commissioned from Sultan Qaboos University by Oman LNG—the state-led consortium that includes Shell and TotalEnergies—which owns the three-train liquefaction facility. The JV says the idea is part of a search for “growth and decarbonisation opportunities”. Using hydrogen to decarbonise the LNG or ammonia production processes could help both ventures meet an anticipated surge in Asian demand for ‘green’ versions of both commodities over the next decade and assist Oman LNG in securing new long-term gas sales deals with Japan and South Korea when existing contracts expire around mid-decade.

Discussions around decarbonisation are also feeding-into negotiations between the government and its foreign partners over the extension of Oman LNG's 25-year concession beyond its scheduled end in 2025.

The willingness of the small cohort of IOCs involved in Oman’s upstream sector to invest in the country's transition provides a potential boost to Muscat’s hydrogen ambitions.

Shell and TotalEnergies signed up in December for an integrated project to exploit gas reserves in the northwest of Oman and develop downstream schemes in which to use the output. The French major is building a modular LNG-bunkering plant at Sohar; Shell has yet to commit to a specific project but says it will “produce and sell low-carbon products and support the development of hydrogen”.

Project pipeline

Meanwhile, the existing project pipeline continues to firm up. On 7 March, Norwegian solar specialist Scatec agreed to take a 50pc stake in the estimated $3.5bn green hydrogen and ammonia plant planned at Duqm by India’s Acme, first announced a year ago and subsequently expanded to encompass a plant ultimately producing 1.2mn t/yr of green ammonia from 3.5GW of renewables.

The first phase will manufacture 100,000t/yr using 500MW of solar power capacity. The new partners claimed to be engaged in advanced discussions with “reputable offtakers” for 20-25-year sales contracts, which would allow the scheme to move towards financial close.

The Acme/Scatec team will be working alongside Hyport, a JV of OQ and Belgium’s DEME, which is planning a similar facility with an initial electrolyser capacity of 500MW, with Germany’s Uniper in place as a provisional offtaker.

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Author: Clare Dunkley