As Oman prepares to receive proposals for integrated hydrogen projects under its latest bidding round, its attentions are turning to the infrastructure and regulation needed to support developers’ plans.

In September, Oman’s state-owned OQ Gas Networks (OQGN) signed a memorandum of understanding (MOU) with Belgian energy infrastructure company Fluxys to explore potential strategic collaboration on the development of the sultanate’s hydrogen transportation infrastructure.

Separately, Hydrom, the government hydrogen company, included the installation of a 2,000km pipeline network in an outline of its wider plans to develop the common infrastructure required for the country’s expanding slate of green hydrogen production, conversion and export projects.

Oman’s national hydrogen strategy, published a year ago, calls for the sultanate to produce 1–1.25mt/yr by 2030. The IEA assessed in a report published in June that, based on the project pipeline, the sultanate would become the world’s sixth-largest exporter of the fuel and its derivatives by that year—a huge fillip for Muscat’s drive to make low-carbon hydrogen a bedrock of its economic diversification strategy.

1–1.25mt/yr – B2030 production target

Hydrom’s first bid round, concluded in March, allocated land in the Duqm area on the central east coast to the developers of six schemes with a potential 700,000t/yr of combined green hydrogen output. It is also auctioning three 340–440km² plots in the southern Dhofar governorate under a second round, which is due to conclude by April 2024.  Applications for prequalification are due by 8 October.

First round investors include BP, Shell and South Korean steel giant Posco. However, it is notable that none of the projects to which developers have provisionally committed have reached FID.

Lack of firm offtake deals required to make the schemes bankable is the central obstacle, but Muscat is also aware of the need for midstream infrastructure to smooth the path to construction and commissioning—and later to facilitate internal transfer of hydrogen to decarbonise domestic industry.

The attention to midstream development is running in parallel to the establishment of a solid legal and regulatory framework for the sector.

Pipelines

Speaking at an industry conference in London in mid-September, Hydrom Planning Manager Hafsa al-Subhi outlined the government’s infrastructure plans. In the first phase, scheduled for completion by 2030, a common-user hydrogen pipeline network would be installed at the three emerging hydrogen clusters: Duqm, Al-Jazir and Salalah, with a link between Al Jazir and Duqm.

By 2040, Duqm and Salalah would also be connected, and a so-called ‘hydrogen backbone’ laid to transport the fuel to Sohar, Oman’s main port and industrial city in the far north, where demand to decarbonise hard-to-abate industries such as steelmaking and cement will be greatest.

In the next decade, at the end of which production is due to have risen to 7.5–8.5mt/yr, the network would be expanded further, taking in Muscat.

While developers are responsible for installing the vast renewables capacity needed to power their projects’ electrolysers, and the internal pipelines connecting the schemes’ various upstream and downstream components, Hydrom will also construct other common infrastructure, including desalination plants and transmission lines, Subhi said.

The prospectus for OQGN’s IPO—which aims to raise some $551m in the biggest share sale for over a decade on the Muscat Stock Exchange—also reflects the government’s thinking around internal hydrogen transportation. It makes the case for dedicated pipelines, on the basis that adapting the existing 4,000km gas network to accept a blend of natural gas and hydrogen would be prohibitively costly at hydrogen levels of more than 10%. Another issue is the key customers, notably Oman LNG, require undiluted natural gas.

OQGN signed an MOU with Hydrom in June to collaborate on hydrogen pipeline development. The former’s mandate to take the lead was confirmed by the tie-up with Fluxys, which is working domestically to develop a cross-country hydrogen pipeline in Belgium and an open-access green ammonia import terminal at port of Antwerp-Bruges. Most projects on Oman’s slate call for converting the hydrogen to ammonia for export.

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Author: Clare Dunkley