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    Blocks granted for three green hydrogen projects worth $20bn


    June 5, 2023 - Muscat Daily

     

      Muscat - Hydrogen Oman SPC (Hydrom), a subsidiary of Energy Development Oman (EDO), signed three agreements on Thursday granting the first green hydrogen blocks in Oman with a total investment exceeding US$20bn.

      The first block was awarded through Phase A Round 1 public auction process, and the other two were awarded following the earlier signing of commercial term sheets. The signing of these agreements signifies another key milestone in Oman's journey to becoming a global hub for green hydrogen production.

      H E Eng Salim Nasser al Aufi, Minister of Energy and Minerals and Chairman of the Board of Directors of Hydrom, signed the agreements with the winning bidders from Denmark, the United States of America (USA), the United Kingdom (UK), Kuwait, Singapore and Oman during an event held in Muscat.

      The three projects were signed with the consortia of Amnah, Green Energy Oman (GEO) and BP Oman.

      These contracts are expected to yield a total production capacity of 0.5mn tonnes of green hydrogen per annum from more than 12GW of installed renewable energy capacity at three sites, each covering an area of 320sqkm in Al Wusta governorate.

      The first of two blocks (Z1-01) in the public auction process launched last year was awarded to Amnah consortium, comprising 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 4.5GW of installed renewable energy capacity for planned green steel plants located in the Port of Duqm, within the Special Economic Zone at Duqm (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.

      The second agreement was signed with BP Oman for a project to produce green hydrogen for ammonia production and export. The anticipated annual production for this project is 150 KTPA of green hydrogen from 3.5GW of installed renewables capacity in Block Z1-03.

      The third agreemeent was signed with the consortium of GEO for the development of green hydrogen and its derivatives. The consortium includes Oman's integrated energy company OQ, Oman Shell, Kuwait's energy investor EnerTech (ETC), InterContinental Energy (ICE) and Golden Wellspring Wealth for Trading (GWWT). This project is expected to produce up to 150 KTPA of green hydrogen from 4GW 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, which regularised the legacy initiative projects under a regulatory framework.

      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.

      The agreement was signed by H E Dr Khalfan Said al Shuaili, Minister of Housing and Urban Planning; H E Aufi, Minister of Energy and Minerals; and Dr Firas al Abduwani, Acting Managing Director of Hydrom.

      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.

      A memorandum of understanding (MoU) was also signed between Hydrom and OQ Gas Networks (OQGN), the exclusive operator and owner of Oman's natural gas transportation system.

      The MoU aims to establish collaboration between the parties for the development of pipelines for green hydrogen.

      In addition, EDO signed an MoU with Siemens Energy for research and development. This agreement aims to establish collaboration in the fields of green hydrogen technology, innovation, and expertise exchange.

      'Today, with the completion of the regulatory framework, sector structure, first investment opportunities, and block awarding mechanisms, Oman is at the forefront of taking its first serious steps towards green hydrogen production among other nations,' said H E Aufi.

      In the coming years, he expects Oman to become one of the leading countries in green hydrogen production. 'There is a significant demand from major international companies to invest in the Omani hydrogen sector, and we look forward to collaborating with our partners to establish a strong and resilient presence in this promising sector over the next few decades.'

      According to H E Dr Shuaili, Oman has allocated over 50,000sqkm in the governorates of Al Wusta and Dhofar for green hydrogen projects to be awarded in stages.

      'These achievements will solidify Oman'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,' stressed Eng Mazin al Lamki, CEO of EDO.

      '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.'

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