Oman is on track to become the Middle East’s leading hydrogen exporter—and the sixth-largest exporter in the world—by 2030, as its high-quality renewable energy resources and vast tracts of available mean it has the potential for large-volume production, the IEA says.

The country aims to produce at least 1mn t/yr of renewable hydrogen by 2030, a target that the IEA estimates would require cumulative investment of about $33bn. Electrolysis on this scale would need around 50TWh of electricity—greater than can be supplied by Oman’s entire electricity system.

Further production targets include up to 3.75mn t/yr by 2040 and up to 8.5mn t/yr by 2050, which would be greater than Europe’s current total hydrogen demand.

“Oman is an oil and gas producer country that is taking an enlightened approach to its energy future” Birol, IEA

The 2040 hydrogen target would represent 80pc of Oman’s LNG exports in energy-equivalent terms, while achieving the 2050 target would almost double them, the IEA says in its first in-depth analysis of the renewable hydrogen potential of a fossil fuel producer country.

“Oman is an oil and gas producer country that is taking an enlightened approach to its energy future, with a clear long-term vision and strong net-zero ambitions,” says IEA executive director Fatih Birol.

“Thanks to its huge potential for low-cost solar and wind, renewable hydrogen is set to bring multiple benefits to Oman.”

Oman’s renewable hydrogen exports are likely to be transported initially in the form of ammonia. It already exports around 200,000t/yr of ammonia, but its export capacity would need to be 20–30 times higher by 2030 if it wants to become a significant international hydrogen supplier in that timeframe, the IEA says. This would require substantial and timely investment, especially for storage tanks and dedicated deepwater jetties.

Oil and gas account for c.60pc of Oman’s export income, and domestic natural gas supplies more than 95pc of the country’s electricity generation. In 2022, Oman announced a target to achieve net-zero emissions by 2050 and began reducing fossil fuel use in its domestic energy mix.

Concrete measures

Oman is implementing concrete measures to achieve its ambitious targets, the IEA says. In 2022, the government established an independent entity, Hydrom, to lead and manage its hydrogen strategy. So far, 1,500km² of land has been put aside for development by 2030—and up to 40 times more land has been identified for potential production in the long term. Six projects have already been allocated land for renewable hydrogen in the country’s first such auction process.

BP, the main foreign player in the local upstream gas sector, was awarded land to develop a 150,000t/yr plant, based on 3.5GW of greenfield renewables capacity, for conversion to green ammonia. Shell, the historic stalwart of the country’s upstream oil industry, became the operating partner in January in the Green Energy Oman consortium—including Singapore-based Intercontinental Energy, Kuwait’s Enertech and state-owned OQ—which was allotted a plot for the 150,000t/yr, 4GW first phase of a megaproject unveiled in May 2021.

The scheme entails the installation of 25GW of wind and solar across the Al-Wusta governorate for the production of 1.8mn t/yr hydrogen and up to 10mn t/yr carbon-free ammonia.

Another licence was awarded to Denmark-based Copenhagen Infrastructure Partners and Blue Power Partners, in consortium with a subsidiary of local conglomerate Hind Bahwan Group, to develop a plant producing 200,000t/yr of hydrogen from 4.5GW of renewables for use in local green steel projects.

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Authors: Clare Dunkley, Stuart Penson