Oman sees domestic green hydrogen demand at 50,000 t/y
Published: 03:11 PM,Nov 13,2023 | EDITED : 07:11 PM,Nov 13,2023
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MUSCAT: Locally produced green hydrogen necessary to power Oman’s energy transition is projected to rise from around 50,000 tonnes per year (t/y) in 2030 to about 1.4 million t/y in 2050, according to a top official of Hydrom, the orchestrator and master-planner of Oman’s renewable hydrogen sector.
Eng Abdulaziz bin Said al Shidhani, Managing Director, said the zero-carbon fuel will be used as a primary energy resource in the production of green steel, direct reduced iron, green cement and other projects expected to emerge at the Special Economic Zone (SEZ) in Duqm when green hydrogen becomes commercially available by around 2030.
“We see that the domestic demand for green hydrogen in 2030 will reach about 5% of production, but this share will rise to about 17% by 2050, coinciding with the increase in the produced energy. This means that domestic demand will be within 50,000 tonnes per year, but it will gradually increase to reach about 1.4 million tonnes by 2050, in conjunction with the increase in energy produced to 8 million tonnes per year,” he said.
Speaking to Duqm Economist, the newsletter of the Public Authority for Special Economic Zones and Free Zones (OPAZ), the official however stressed that any domestic requirement of green hydrogen will take precedence over exports, given the strategic imperative of decarbonizing the Omani economy.
“I would like to emphasize here that the priority will be for domestic consumption,” he said. “We consider export as a good opportunity to increase revenues and direct surplus production, as we have taken into account in the agreements to increase the percentage allocated for domestic consumption if demand rises.”
Much of the initial demand for green hydrogen will be driven by a trio of mega-scale metallics ventures that have signed agreements to set up hydrogen-ready projects at the Duqm SEZ. They comprise an integrated green steel complex of Vulcan Green Steel, a hot briquetting iron and green metallics project of Vale, and a direct reduction iron (DRI) venture by the partnership of Kobe Steel and Mitsui.
Markets for the low-carbon products of these projects will be predominantly climate-conscious Europe and the Far East. But the Omani government also foresees the potential for investors to take advantage of the availability of cost-competitive green hydrogen to set up plants in Duqm for the manufacture of, among other things, metal frames for Electric Vehicles, wind turbine structures, and metal components for a range of white goods.
Eng Abdulaziz bin Said al Shidhani, Managing Director, said the zero-carbon fuel will be used as a primary energy resource in the production of green steel, direct reduced iron, green cement and other projects expected to emerge at the Special Economic Zone (SEZ) in Duqm when green hydrogen becomes commercially available by around 2030.
“We see that the domestic demand for green hydrogen in 2030 will reach about 5% of production, but this share will rise to about 17% by 2050, coinciding with the increase in the produced energy. This means that domestic demand will be within 50,000 tonnes per year, but it will gradually increase to reach about 1.4 million tonnes by 2050, in conjunction with the increase in energy produced to 8 million tonnes per year,” he said.
Speaking to Duqm Economist, the newsletter of the Public Authority for Special Economic Zones and Free Zones (OPAZ), the official however stressed that any domestic requirement of green hydrogen will take precedence over exports, given the strategic imperative of decarbonizing the Omani economy.
“I would like to emphasize here that the priority will be for domestic consumption,” he said. “We consider export as a good opportunity to increase revenues and direct surplus production, as we have taken into account in the agreements to increase the percentage allocated for domestic consumption if demand rises.”
Much of the initial demand for green hydrogen will be driven by a trio of mega-scale metallics ventures that have signed agreements to set up hydrogen-ready projects at the Duqm SEZ. They comprise an integrated green steel complex of Vulcan Green Steel, a hot briquetting iron and green metallics project of Vale, and a direct reduction iron (DRI) venture by the partnership of Kobe Steel and Mitsui.
Markets for the low-carbon products of these projects will be predominantly climate-conscious Europe and the Far East. But the Omani government also foresees the potential for investors to take advantage of the availability of cost-competitive green hydrogen to set up plants in Duqm for the manufacture of, among other things, metal frames for Electric Vehicles, wind turbine structures, and metal components for a range of white goods.