Oman to sign multibillion-dollar hydrogen deals

25 April 2023
Hydrom signed term-sheet agreements with developers of six projects in March


Hydrogen Oman (Hydrom) is expected to sign the official contracts with the developers of the proposed multibillion-dollar integrated or legacy green hydrogen projects in the sultanate over the next two to three months, a source close to the project tells MEED.

It is understood that the first contracts are scheduled to be signed in May and the others in June.

Last month, Hydrom signed term-sheet agreements for six green hydrogen projects, requiring an estimated investment of $20bn.

The commercially binding agreements were signed with the stakeholders of six projects expected to be developed on a total land area covering 1,500 square kilometres in Oman’s Al-Wusta and Dhofar governorates and close to the ports in Duqm and Salalah.

Oman’s Energy & Minerals Minister and Hydrom chairman Salim al-Aufi signed the agreements with the developers.

The agreements include a contracting period of 47 years, of which seven years is allocated for the development and establishment of the projects and 40 years for operating the projects.

A team led by Saudi utility and hydrogen developer and investor Acwa Power, which is planning to develop an $8.5bn green hydrogen complex in Dhofar, was not included in the term-sheet agreement signing.

MEED previously reported that Hydrom expects to sign project development and sub-usufruct agreements by June with the successful bidders for the land blocks being auctioned for integrated green hydrogen projects in Oman.

MEED understands Hydrom will provide developers with desalinated water and hydrogen pipelines as part of the agreements.

Phase A of the land auctions will comprise two bid rounds for integrated green hydrogen projects in Duqm and Thumrait.

Initially, Hydrom aimed to award two blocks in the Duqm area by the end of the first quarter of 2023, with four blocks to be awarded in the Thumrait area by the end of 2023.

Oman expects winning developers for the first phase of its programme to deliver integrated projects that cover the full green hydrogen value chain. These projects are expected to include:

  • Renewable energy production: wind/solar mix to ensure competitive levelised cost of hydrogen
  • Hydrogen production: could be polymer electrolyte membrane or alkaline electrolysers
  • Hydrogen derivatives conversion: end product, whether hydrogen, ammonia or methanol, among others, is up to the developers
  • Offtaker: developers are expected to secure offtake for their products

The planned auctions support Oman’s goal to produce 1 million tonnes a year of green hydrogen by 2030.

Developers are expected to bid as part of consortiums and partner with a government-owned entity after the award.

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