Oman’s state-owned hydrogen auctioneer Hydrom has this week awarded a block of land to the SalalaH2 consortium, bringing production capacity — if all six blocks awarded so far are developed — to 925,000 tonnes per year by 2030.
This is only 75,000 tonnes short of the country’s target of one million tonnes of annual production capacity by that year.
The SalalaH2 consortium, one of the legacy projects pre-dating the auction system, which was promised land rights last year, is also the first to be awarded development rights to land outside the port of Duqm.
Hydrom completed its first auction for two blocks of land in Duqm, as well as confirming three legacy projects in the area, in June this year.
“The total investment of round one is roughly $30bn, 18GW electricity to be produced, and this would take us [to] almost three-quarters of our aspiration of one million tonnes by 2030 — in total, 750,000 tonnes per annum”, the government-founded agency’s managing director, Abdulaziz Al Shidhani, estimated during a speech at the Green Hydrogen Summit Oman in Muscat.
He added that the SalalaH2 consortium — which consists of Omani state-owned oil and gas firm OQ, Japanese conglomerate Marubeni, construction company Dutco Group and Korea’s Samsung C&T — adds $8bn of committed investment and brings the pipeline of new renewable electricity capacity built for green hydrogen to 22.5GW.
Hydrom is currently running an auction for three blocks of land in the southern province of Dhofar — where SalalaH2’s project will be located — for which 200 companies had registered at close on 28 November, with more than 40 moving through to a request-for-quote process.
“We are expecting to receive bids by 28 January next year, with an aim that we sign blocks [at the] end of Q2 2024,” Al Shidhani added, noting that two or three awards would bring the project pipeline beyond one million tonnes a year by 2030.
However, while Oman is awarding development rights per block of land, these projects still have to go through each development phase.
Many in the pipeline are still in the midst of feasibility studies or front-end engineering and design — far from a final investment decision (FID) on actually building out this capacity.
The only green hydrogen project in Oman to have started construction, a 300MW facility being built by India’s ACME following a loan from infrastructure bank REC, had secured its land rights through a separate land reservation agreement rather than the Hydrom auction process.
In a June report, the International Energy Agency suggested that while $33bn would need to be spent for Oman to reach its green hydrogen production targets by 2030, this could make the country the sixth largest exporter of renewable H2 in the world.
Meanwhile, if this hydrogen was used domestically to displace existing grey H2 in refining, the IEA notes that this would free up three billion cubic metres of domestic gas consumption for export as LNG.