Friday 26 / April / 2024
Muscat: Hydrom has signed three agreements awarding the first green hydrogen projects in Oman, the Ministry of Energy and Minerals said.
The Ministry of Housing and Urban Planning, Ministry of Energy and Minerals and Hydrom signed a Head-Usufruct Agreement, granting land rights for renewable energy and clean hydrogen projects
As part of Oman’s ongoing initiatives to foster the development of its hydrogen sector, Hydrogen Oman SPC (Hydrom), a subsidiary of Energy Development Oman SAOC (EDO), has signed three agreements granting the first green hydrogen blocks in Oman. The first one is awarded through Phase A Round 1 public auction process, and the other two are awarded following the earlier signing of commercial term sheets on 14th March 2023.
The signing of these agreements signifies another key milestone of the Sultanate’s journey to become a global hub for green hydrogen production.
HE Eng. Salim bin Nasser Al-Aufi, Minister of Energy and Minerals (MEM) and Chairman of the Board of Directors of Hydrom signed the agreements with the winning bidders from Denmark, USA, UK, Kuwait, Singapore and Oman during a special event on Thursday, 1 June, 2023, to announce the winners.
The event was attended by HE Dr. Khalfan bin Said Al Shuaili, Minister of Housing and Urban Planning, several ambassadors, senior officials from the public and private sectors, and representatives from local and global media.
The total investments in the three projects signed with the consortia of Amnah, Green Energy Oman (GEO) and BP Oman is expected to exceed 20 billion USD.
These contracts are expected to yield a total production capacity of half a million tonnes of green hydrogen per annum from more than 11.5 GW of installed renewable energy capacity at the three sites, each covering an area of 320 km² in the Al Wusta Governorate.
The first of two blocks (Z1-01) in the public auction process launched in November last year was awarded to a consortium of Copenhagen Infrastructure Partners (CIP), Blue Power Partners (BPP) and Al Khadra, part of Oman’s Hind Bahwan Group.
The consortium will develop around 200 KTPA of green hydrogen from 4.5 GW of installed renewable energy capacity, for planned green steel plants located in Port of Duqm, within SEZAD.
This ground-breaking project demonstrates the potential of harnessing renewable energy in supporting the diversification of the national economy, and contributing to a low carbon future.
Furthermore, the second project was signed with bp Oman for the development of green hydrogen for ammonia production and export.
The anticipated annual production for this project is 150 KTPA of green hydrogen from 3.5 GW of installed renewables capacity in Block Z1-03.
Additionally, the third project was signed with the consortium of Green Energy Oman (GEO) for the development of green hydrogen for the purpose of exporting Ammonia. The consortium includes Oman’s integrated Energy Company OQ, Shell Oman, Kuwait's state-backed energy investor EnerTech (ETC), InterContinental Energy (ICE) and Golden Wellspring Wealth for Trading (GWWT).
This project is expected to produce 150 KTPA of green hydrogen from 4 GW of installed renewables capacity in Block Z1-04.
The signing of these project agreements with both bp Oman and GEO follows the earlier signing of commercial term sheets in March, which regularised legacy initiative projects under a regulatory framework in accordance with Royal Decree 10/2023.
During the event, a head-usufruct agreement was signed by the Ministry of Housing and Urban Planning, the Ministry of Energy and Minerals and Hydrom. This agreement provides for the granting of land rights to Hydrom for the purposes of renewable energy and clean hydrogen projects as per Royal Decree 10/2023 issued on 16 February, 2023.
The agreement was signed by HE Dr. Khalfan bin Said Al Shuaili, and HE Eng. Salim bin Nasser Al-Aufi.
During the event, Hydrom announced the formation of an Advisory Board to oversee the development of common utilities infrastructure, orchestrated by Hydrom in coordination with the lead developers of green hydrogen projects, national utility operators and international developers of green hydrogen infrastructure.
To support this initiative, a Memorandum of Understanding was signed between Hydrom and OQ Gas Networks (OQGN), the exclusive operator and owner of Oman's natural gas transportation system. The agreement aims to establish collaboration between the parties in the field of green hydrogen pipelines development.
The MOU was signed by Dr. Firas Al-Abduwani, Acting Managing Director of Hydrom and Eng. Mansoor Ali Al-Abdali, Managing Director of OQGN.
In addition, Energy Development Oman (EDO) signed a Research and Development MoU with Siemens Energy, a leading global energy technology company. This agreement aims to establish collaboration in the fields of green hydrogen technology, innovation, and expertise exchange.
The MOU was signed by Eng. Mazin bin Rashid Al-Lamki, Chief Executive Officer of EDO, and Khalid bin Hadi, Managing Director of Siemens Energy.
Speaking about the agreements, HE Eng. Salim bin Nasser Al-Aufi stated, “We are delighted to witness the signing of these agreements. Today, with the completion of the regulatory framework, sector structure and these first investment opportunities, we officially announce the beginning of the Sultanate’s journey of production in accordance with the directive of His Majesty Sultan Haitham bin Tarik. In the coming years, Oman is poised to become one of the leading countries in green hydrogen production. “
He continued:”We are confident that we are on the right path to establish a bright future for renewable and sustainable energy, as outlined by Oman Vision 2040. There is significant demand from major international companies to invest in the Omani hydrogen sector. We look forward to collaborating with our partners to establish a strong and resilient presence in this promising sector over the next few decades.”
“We are pleased to sign the Head-Usufruct agreement, which aligns with Royal Decree No. 10/2023, stipulating the allocation of land plots for renewable energy and clean hydrogen projects. This step reinforces Oman’s stable investment environment and global position in renewable energy development and is in line with the government’s objectives to stimulate investment in the green hydrogen field. Oman has allocated over 50,000 km² in the governorates of Al Wusta and Dhofar for green hydrogen projects to be awarded in stages.” stated HE Dr. Khalfan bin Said Al Shuaili, Minister of Housing and Urban Planning.
Commenting on the achievements, Eng. Mazin Al Lamki, CEO of EDO said “We commend the remarkable milestones accomplished by Hydrom. Undoubtedly, these achievements will solidify the Sultanate’s position in this promising sector. Oman is well-positioned for green hydrogen production and export thanks to its abundant renewable resources, existing energy and transport infrastructure, industrial ports, and established international partnerships. “
He confirmed that the development of the green hydrogen economy presents a strategic opportunity for both Omani and international companies to participate and collaborate, driving local and global energy security and economic diversification. This is in line with EDO’s objectives to generate investment opportunities in Oman’s energy sector and maximise financial returns.
Karsten Plauborg, Partner at Copenhagen Infrastructure Partners says: “We are very pleased and proud to announce our corporation with the Omani government. Power-to-gas and green hydrogen will be a key component of every modern energy system and with decades of renewable energy experience CIP is well placed to play our part and unlock the potential of Omani wind, sun, water, and air. “
“Due to the quality of the renewable resources and the sheer size of the land, Oman is poised to become home to industrial scale clean (decarbonised) steel, fertiliser and other hard-to-abate sectors. And we look forward to working alongside the government and local stakeholders in reducing global carbon emissions at industrial scale, while enhancing productivity and prosperity in Oman,” she added.
In recent times, Oman has taken significant measures to stay abreast of the latest global developments in the energy sector, and to address investor and customer concerns. This commitment was demonstrated through the announcement of the Sultanate’s pledge to achieve zero carbon emissions by 2050, the introduction of the national strategy for green hydrogen, the review of regulatory and legal frameworks, and the formulation of necessary policies to advance green energy transformation projects. All of these are aimed at achieving the strategic goals of Oman Vision 2040.
To spearhead the country’s ambitious green hydrogen strategy, the government has established Hydrogen Oman SPC (Hydrom), a fully independently owned subsidiary of Energy Development Oman SAOC. Regulated by the Ministry of Energy and Minerals (MEM), Hydrom serves as the overall orchestrator and master planner of Oman’s green hydrogen sector.
Its mandate includes identifying government-owned land areas, structuring large-scale green hydrogen projects, managing the allocation process to developers, and facilitating the development of shared infrastructure and connected ecosystem industries and hubs.
