Oman awards green hydrogen/ammonia project to South Korea’s top steelmaker POSCO, France’s Engie
Author Charles Lee
Editor Claudia Carpenter
Commodity Electric Power, Energy Transition, LNG, Natural Gas, Oil, Metals
HIGHLIGHTS
Oman plans 8.5 mil mt/year of green hydrogen by 2050
POSCO will use output to make steel
Oman on track to be top Middle East hydrogen exporter by 2030: IEA
Oman has awarded a project to produce 220,000 mt/year of green hydrogen and 1.2 million mt/year of green ammonia to a consortium including South Korea’s top steelmaker POSCO and France’s Engie.
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Register Now The project in Oman’s Duqm on the country’s east coast was awarded by Hydrogen Oman, or Hydrom, POSCO said June 22. The four other companies involved are Samsung Engineering, Korea Southern Power, Korea East-West Power and Thailand’s state-run petroleum exploration and production firm PTTEP. It will beSouth Korea’s largest green hydrogen project overseas, POSCO said.
The consortium plans to break ground for the plants in 2027 with an aim to complete mechanical construction in 2030. The development rights for the land runs for 47 years. Hydrom did not respond to emails seeking comment.
Oman, the Middle East’s biggest oil producer outside OPEC, plans to develop 8.5 million mt/year of green hydrogen projects by 2050, with 1.25 million mt/year available by 2030, officials said last year. In March, Hydrom signed term sheet agreements with developers including BP. The country is on track to become the largest exporter of hydrogen in the Middle East by 2030, the International Energy Agency said in a June 12 report.
Duqm port
Engie and POSCO said in a separate statement the consortium won land block (Z1-02) offered by Hydrom. The concession block spans 340 sq km, with downstream elements to be established at the Port of Duqm.
The land block will include a total renewable energy capacity f approximately 5 GW of wind and solar power, in addition to battery energy storage and a hydrogen plant, the companies said. The hydrogen will then be transported by a pipeline to Duqm where it will be converted into approximately 1.2 million mt/year of green ammonia for export.
In March 2022, POSCO and Engie said they signed a memorandum of understanding to explore joint development opportunities for green hydrogen production and related infrastructure in the Middle East, Australia, and Latin America. Engie wants to be net-zero carbon by 2045 and Oman, which also produces crude oil, natural gas and LNG, has a net-zero target of 2050.
POSCO Holdings and its partners plan to convert hydrogen produced at the Oman plant into ammonia for easy shipments and storage in South Korea, while some hydrogen would be used in Oman. The production will be used in steelmaking and power production in South Korea.
POSCO Holdings controls the largest stake in the consortium with 28%, followed by ENGI with 25%. Samsung Engineering, Korea Southern Power and Korea East-West Power own 12%, respectively, with PTTEP holding the remaining 11%.
The Oman deal is expected to boost POSCO Holdings’ efforts to secure a stable supply source of hydrogen to convert its carbon-based steelmaking system to one based on hydrogen. POSCO Holdings aims to have a hydrogen production capacity of 7 million mt/year by 2050.
Late last month, Oman’s energy undersecretary Mohsin bin Hamad bin Saif Al Hadhrami travelled to POSCO’s main steel plant in Pohang on South Korea’s southeast coast and met Vice Industry-Energy Minister Kang Kyung-sung in which they agreed to boost cooperation for green hydrogen protects in the Middle East country.