IEA: Oman Has Largest Green Hydrogen Project Pipeline in ME

With an ambitious target of exporting one million tons of green hydrogen annually by 2030, Oman has the largest low-emission hydrogen project pipeline in the Middle East region, according to the International Energy Agency (IEA). “Oman has opportunities for renewable-based hydrogen production. The sultanate has the largest low-emission hydrogen project pipeline in the Middle East by 2030,” Dr Abdullah al Abri, consultant and Oman’s representative at Paris-based IEA, said while giving a presentation at the recently held Green Hydrogen Summit Oman 2022. As per IEA’s global estimates, an estimated 12 million tons of low-emission hydrogen per year could be exported by 2030 based on the current export pipeline. “Oman could be responsible for 61% of the total hydrogen exports from the Middle East [by 2030],” Abri noted. The sultanate has set an ambition to become one of the largest green hydrogen producers and exporters globally, targeting production of one million tons by 2030. With the announcement of a clear green hydrogen strategy and growing interest from international investors, Oman’s government is expecting to attract total investment worth more than US$20 billion in the green hydrogen sector by 2030.

Cost competitive

Abri noted that the cost competitiveness of green hydrogen is driven by outlook for natural gas prices. He said the cost of renewable hydrogen is expected to decrease from US$3.5/kg in 2022 to approximately US$1.5/kg in 2030, while the cost of fossil hydrogen could be as high as US$4/kg due to increasingly tight gas market. “The cost of renewable hydrogen in Oman could reach US$1.45/kg by 2030. However, the cost of ammonia conversion and transport add significantly to the total supply cost,” he said. According to Abri, Oman’s planned hydrogen exports by 2030 represent one-sixth of today’s LNG export volume. “Capturing a 10%-15% share of the international hydrogen trade in 2040 would provide similar export volumes for Oman that LNG provides today,” he noted during the presentation. Oman’s economy currently relies on fossil fuels, but the country has also abundant renewable energy resources, Abri said, adding, “Oman has made a net-zero emissions commitment by 2050 and has set ambitious targets for renewables and renewable hydrogen production.” The IEA is preparing a report on how large-scale development of green hydrogen could help Oman to establish new revenues streams and decarbonize domestic energy use. The report will be published in the first quarter of 2023, Abri said. As the sultanate advances its energy transition strategy, hydrogen as a fuel can displace the use of natural gas in industrial process for high temperature heat. As per the IEA estimates, medium and high temperature heat cover 84% of the total energy needs of Oman’s industrial sector, while steam and low temperature heat cover the remaining 16%. To accelerate the development of green hydrogen sector, Oman recently launched Hydrogen Oman (Hydrom) – an autonomous subsidiary company of Energy Development Oman (EDO) – with a vision to position the sultanate as a leading global green hydrogen hub. Hydrom is focusing to develop the green hydrogen sector by enabling the delivery of projects competitively and at scale for the world.