AUGUST 5, 2023
Oman well positioned to be forerunner in hydrogen energy
The Sultanate of Oman is well positioned to be a forerunner in the race for hydrogen energy with the country's all-round efforts, The Energy Year reported.
A report featuring Abdulaziz al Shidani, Managing Director of Hydrom, says there have been efforts to develop a green hydrogen economy in Oman, followed by an ambitious hydrogen strategy since last year.
"We see this trend in Oman to become a forerunner in the hydrogen race starting from the Royal directives early last year to accelerate steps to develop green hydrogen economy in Oman," Al Shidani is quoted as saying.
According to him, this was followed by an ambitious but straightforward strategy announced late last year and the result-oriented moves demonstrated in a record time to sign five project development agreements worth more than $30 billion with international investors, along with the launch of the second bid round. That is nothing if not a first-mover path.
"After the announcement of green hydrogen strategy in October last year, we received as many as 14 international players from around 10 countries in the box of the structure where international developers play a role till June," he was quoted by the magazine.
Among these players are large, well-known oil and gas operators, utility developers and operators, infrastructure funds, investment funds, off-takers and technology providers who have shown keen interest in Oman's hydrogen initiatives.
Oman Vision 2040 aims to achieve an average annual GDP growth of 5 per cent, supported by strong ambitions to diversify the domestic economy away from hydrocarbons, maximise In-Country Value (ICV) and create attractive jobs for an increasingly young population.
This was followed by the Royal directives in March 2022 to move towards green hydrogen economy in the country, culminating in the announcement of Oman's green hydrogen strategy in October 2022, which gave clarity to the various green hydrogen moves in the country.
"However, the biggest challenge for hydrogen is the global disconnection between supply and demand, and these are the main barriers preventing a faster and more widespread deployment of hydrogen," adds Al Shidani.
To make hydrogen work, developers need to have a captive demand and consistent clients they can send hydrogen and its derivatives, he was quoted as saying.
"What adds to the complexity is the trade-off between short-term energy security challenges with the opportunity to tap into the incentive schemes offered by governments and long-term offtake commitments and the anticipated technological breakthroughs that will bring the cost down," Al Shidani added.
Hydrom is owned by Energy Development Oman and was launched in 2022 to orchestrate, structure and accelerate the development of the green hydrogen sector in Oman.
Hydrom has ambitious plans to award and sign at least five of the six blocks by Q1 2024 and is expecting other players, such as port operators and regional gas infrastructure operators from different continents, to join in the long race for greener energy sources.