Oman’s Hydrom Opens for 2nd Auction, Driving Green Hydrogen Production for Net Zero
Image Source: IEEFA
Oman Energy Development subsidiary, Hydrom, invites global energy companies interested in sustainable energy to take part in the second round public auction for green hydrogen development in Dhofar Governorate.
Hydrom (Hydrogen Oman) was launched in 2022 to lead and manage Oman’s hydrogen strategy. In this auction, Hydrom will provide participating firms 3 prime blocks from 340km2 – 400km2 especially allotted to green hydrogen production.
The goal is to take advantage of the largest Governorate’s renewable energy resources to establish a strong green hydrogen industry in the sultanate.
Driving Oman’s Green Hydrogen Growth
Interested companies will go through a 3-stage evaluation process to find suitable applicants with robust financial, development, and operational capabilities:
- 1st stage – Minimum Qualification Criteria for financial and expertise
- 2nd stage – Minimum Bid Criteria for project proposals aligning with Oman’s green hydrogen goals
- 3rd stage – Evaluation Framework
This process is to ensure a transparent and fair auction where qualified bidders with the right expertise and alignment are necessary for driving Oman’s green hydrogen growth.
The next phase of the auction will begin this month, with a bid submission due in January next year. Companies wanting to join can find detailed information for the green H2 auction on Hydrom’s website.
Hydrom was officially formed last June when the minister of energy and minerals, Salim bin Nasser Al Aufi, also chairman of Hydrom, signed 6 green hydrogen contracts worth $20 billion from various partners. These include large oil and gas companies such as BP and Shell. These first auction deals aim to produce 500,000 tonnes of green hydrogen each year in Oman.
Now, the overall production target moves up to 1 million tonnes of green H2 by 2030, 3.75 million by 2040, and 8.5 million by 2050, which is more than Europe’s total current H2 demand. If met, Oman will become the world’s 6th biggest exporter of hydrogen by 2030.
Oman’s 2040 hydrogen target is equivalent to 80% of its current LNG exports, while its 2050 goal doubles the volume.
In July, Hydrom revealed that commitments from their green H2 deals increased to $30 billion. In December last year, Oman and the International Energy Agency (IEA) partnered on green hydrogen projects.
Why Hydrogen?
According to the World Bank, the global hydrogen market was valued at $130 billion in 2022. Industry estimates project it to grow by over 9% each year until 2030.
- First Hydrogen (FHYD) brings hydrogen vehicles to North America, Europe, and the UK
Currently, the hydrogen energy sector is still in its early stages of growth. Producing clean H2 or green hydrogen cheaply remains the biggest challenge for the industry to scale rapidly and globally. Fortunately, hydrogen is highly in demand in some industries and there are incentives in producing green H2.
Mckinsey & Company estimated that the total hydrogen production capacity announced by companies by 2030 increased by over 40% to 38 metric tons per year. This capacity is about half the volume needed to be on track to net zero (75 Mt p.a.).
Source: Carbon Credits
