Muscat has been swiftly playing catch-up in renewables over the past two years—driven by a longstanding gas shortage, falling solar power costs and global decarbonisation pressure—and more recently it has been talking about expanding its clean energy drive into the hydrogen space. Meanwhile, New Delhi, a close political and trading partner, formally embarked in February on a National Hydrogen Mission to replace fossil fuels with the new energy source.

In early March, the twin ambitions were happily married—spawning an agreement for Indian conglomerate Acme to invest some $2.5bn in developing a 2,200t/d green hydrogen and ammonia production plant at Duqm, on the sultanate’s central east coast.

The pact, enshrined in a memorandum of understanding with the government’s Oman Company for the Development of the Special Economic Zone at Duqm (Tatweer), is the second international green hydrogen investment in the space of three months at the fledgling commercial hub. A 150km² area has been reserved for green energy projects—after Belgium’s DEME announced its decision to proceed to engineering and design work on the first phase of a similar, smaller project, initially with an electrolyser capacity of 250-500MW.

Strategic location

Acme is making its first move into hydrogen production with a local pilot project in the northwestern state of Rajasthan that is due onstream by end-April. It explained its choice of the Omani port for its maiden commercial-scale plant on the same basis as its European counterpart—namely a strategically advantageous location coupled with world-leading levels of solar irradiation.

The putative new hub is fortuitously situated on key east-west trade routes—while crucially lying outside the overcrowded, politically sensitive, Iranian-controlled Strait of Hormuz

Remote in local terms, the putative new hub is fortuitously situated on key east-west trade routes—while crucially lying outside the overcrowded, politically sensitive, Iranian-controlled Strait of Hormuz. The Indian firm, one of its home country’s biggest solar power developers, spoke of the potential to supply green ammonia “across Europe, America and Asia region”—although Asia, where fossil fuel poor nations are increasingly toying with the idea of importing hydrogen derivatives to feed power and industry, would likely be the primary destination

Meanwhile, Muscat itself is belatedly waking up to the potential of its vast tracts of sun-baked, lightly populated land. Around 1.5GW of solar generation projects are now being executed and will hike capacity more than sevenfold by mid-decade, with Oman having adopted a target two years ago for renewables to account for 30pc of the energy mix by 2030.

A history of strong bilateral political and economic ties, manifested especially in the energy sector, provide a nurturing backdrop to the landmark hydrogen tie-up. India is the second-largest buyer of Omani crude after China and in 2019 made its first equity investment in the sultanate’s upstream sector by buying a stake in its largest oil field.

Downstream, joint venture Oman India Fertiliser Company was formed some 15 years ago between Omani government-owned OQ (formerly Oman Oil Company: OOC) and a pair of Indian firms to develop a giant gas-based ammonia and urea plant at the Sur industrial area on the Gulf state’s northeast coast, while OOC and a local partner agreed to develop India’s Bina refinery at around the same time. Once again, the countries’ energy ambitions appear in fruitful alignment.