Three pacts worth $20bn signed to develop green hydrogen projects in Oman
Published: 03:06 PM,Jun 01,2023 | EDITED : 07:06 PM,Jun 01,2023
Muscat: Hydrogen Oman SPC (Hydrom), a subsidiary of Energy Development Oman SAOC (EDO), has signed three agreements granting the first green hydrogen blocks in the Sultanate of Oman with a total investment value exceeding USD 20 billion.
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. The signing of these agreements signifies another key milestone of the Sultanate of Oman’s journey to becoming a global hub for green hydrogen production.
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 the Sultanate of Oman during an event held here on Thursday.
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 half a million tonnes of green hydrogen per annum from more than 12 GW of installed renewable energy capacity at the three sites, each covering an area of 320 square kilometres in the Al Wusta Governorate.
The first of two blocks (Z1-01) in the public auction process launched last year was awarded to a consortium comprised 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 the Port of Duqm, within the Social 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 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.
The third project was signed with the consortium of Green Energy Oman (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 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, which regularized 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 Dr Khalfan Said al Shuaili, Minister of Housing and Urban Planning, Eng Salim Nasser al 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.
To support this initiative, a Memorandum of Understanding (MoU) was 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 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.
This MoU was signed by Eng Mazin Rashid al Lamki, Chief Executive Officer of EDO and Khalid Hadi, Managing Director of Siemens Energy.
Eng Salim Nasser al Aufi, Minister of Energy and Minerals said, “Today, with the completion of the regulatory framework, sector structure, first investment opportunities, and block awarding mechanisms, the Sultanate of Oman is at the forefront of taking its first serious steps towards green hydrogen production among other nations. In the coming years, Oman is poised to become one of the leading countries in green hydrogen production. There is 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.”
On his turn, Dr Khalfan Said al Shuaili, Minister of Housing and Urban Planning said, “We are pleased to sign the Head-Usufruct agreement. 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 square kilometres in the governorates of Al Wusta and Dhofar for green hydrogen projects to be awarded in stages.”
Commenting on the event, Eng Mazin al Lamki, CEO of EDO, said, “These achievements will solidify the Sultanate of 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. 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.”
In recent times, Oman has taken significant measures to stay abreast of the latest global developments in the energy sector and address investor and customer concerns. This commitment was demonstrated through the announcement of the Sultanate of Oman’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.
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. The signing of these agreements signifies another key milestone of the Sultanate of Oman’s journey to becoming a global hub for green hydrogen production.
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 the Sultanate of Oman during an event held here on Thursday.
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 half a million tonnes of green hydrogen per annum from more than 12 GW of installed renewable energy capacity at the three sites, each covering an area of 320 square kilometres in the Al Wusta Governorate.
The first of two blocks (Z1-01) in the public auction process launched last year was awarded to a consortium comprised 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 the Port of Duqm, within the Social 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 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.
The third project was signed with the consortium of Green Energy Oman (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 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, which regularized 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 Dr Khalfan Said al Shuaili, Minister of Housing and Urban Planning, Eng Salim Nasser al 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.
To support this initiative, a Memorandum of Understanding (MoU) was 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 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.
This MoU was signed by Eng Mazin Rashid al Lamki, Chief Executive Officer of EDO and Khalid Hadi, Managing Director of Siemens Energy.
Eng Salim Nasser al Aufi, Minister of Energy and Minerals said, “Today, with the completion of the regulatory framework, sector structure, first investment opportunities, and block awarding mechanisms, the Sultanate of Oman is at the forefront of taking its first serious steps towards green hydrogen production among other nations. In the coming years, Oman is poised to become one of the leading countries in green hydrogen production. There is 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.”
On his turn, Dr Khalfan Said al Shuaili, Minister of Housing and Urban Planning said, “We are pleased to sign the Head-Usufruct agreement. 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 square kilometres in the governorates of Al Wusta and Dhofar for green hydrogen projects to be awarded in stages.”
Commenting on the event, Eng Mazin al Lamki, CEO of EDO, said, “These achievements will solidify the Sultanate of 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. 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.”
In recent times, Oman has taken significant measures to stay abreast of the latest global developments in the energy sector and address investor and customer concerns. This commitment was demonstrated through the announcement of the Sultanate of Oman’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.