With the development of a global hydrogen-based economy presenting a significant avenue to advance economic transformation across the GCC, Oman, Saudi Arabia and the UAE have taken the lead in exploring such opportunities. While Saudi Arabia and the UAE are developing general hydrogen strategies, Oman is focusing specifically on green hydrogen generated from renewable or low-carbon energy sources.


Oman aims to produce 7.5m-8.5m tonnes of green hydrogen per year by 2050, by which point global output is set to reach 200m per year. Achieving this is expected to require a cumulative investment of around $140bn. Approximately 50,000 sq km has been made available for renewable energy generation in the sultanate, and around 30% of this area needs to be developed in order to meet the 2050 target.

To meet its goal of producing 1m-1.3m tonnes of green hydrogen per year by 2030, Oman has prioritised the development of two blocks in Duqm Special Economic Zone and four blocks in Salalah Free Zone, with each block approximately 320 sq km. The aim is to build an integrated hydrogen value chain utilising a consortium-based approach. To catalyse this, in October 2022 the government established Hydrogen Oman (Hydrom) to enable project delivery. Hydrom is fully owned by the government-run Energy Development Oman, and it will oversee land and infrastructure management; tenders; and offtake, storage and transport coordination.

Oman plans to select the winning bidders for the Duqm blocks by the end of March 2023, with another round of bids scheduled for April of that year for the Salalah blocks. As of December 2022 request-for-qualification documentation had already been purchased by more than 40 companies, including TotalEnergies and BP. The government has mandated that at least 20% of the Duqm blocks should be offered to government-run entities. Moreover, investors that have agreements in place with potential buyers are expected to be considered more favourably during the bidding process.


Oman has several distinct advantages that will help the country navigate the global energy transition. While its hydrogen sales have to date been primarily concentrated in blue hydrogen – generated mostly from natural gas – to the Asia-Pacific region, the sultanate could leverage its advantage in green hydrogen as an early adopter. An example of this is the $6.5bn H2Oman initiative in Dhofar Governorate unveiled in October 2022 as part of the country’s national hydrogen strategy. The project aims to produce roughly 1.1m tonnes of green hydrogen per year from 3 GW of solar and wind capacity, and 2 GW of electrolyser capacity.

In addition to export opportunities, there is rising domestic demand for green hydrogen in various areas of the economy, including oil refining, ammonia production and transport. Moreover, Oman has a strategic geographic location and favourable natural conditions for the generation of greener sources of energy. The country has a median horizontal irradiation of 6.2 KWh per sq metre, and wind resources that are on par with countries in northern Europe. Both of these figures exceed the recommended thresholds for optimal energy generation. Other strengths include the fact that significant areas of land are available at competitive prices, as well as the country’s political stability. The latter, along with its globally recognised political neutrality, will help the country mitigate geopolitical risks and facilitate market access for Omani exports.

High prices are expected to make gas exports more commercially attractive in the short to medium term, so local demand for hydrogen is expected to play a significant role in the development of the sector by freeing up gas production. By catering to domestic use, Oman can ensure its energy security, develop a value chain in emerging activities, and attract entirely new industries that use affordable and low- or zero-emissions hydrogen while moving towards decarbonisation. Furthermore, focusing at least initially on the domestic market will help the country establish itself as a leader in the hydrogen sphere, especially as some jurisdictions may not import hydrogen and derivatives from countries that are not working towards net zero.


Although the potential for green hydrogen in Oman is significant, some analysts predict deployment will be slow in less developed countries that have access to low-cost natural gas. The primary reason for this uneven maturation in the segment globally is the low cost of hydrogen derived from natural gas, and multinational energy companies’ focus on less complex opportunities in developed markets. Additionally, companies may wait for green hydrogen prices to fall before expanding into developing countries. Oman can mitigate these issues by utilising its potential for renewable energy generation and planning strategically, fostering a strong synergy between the development of green hydrogen for industry, transport and power.

Although Oman has seen an acceleration in the development of solar and wind projects, its ambitions have been relatively modest. However, with the October 2022 announcement of the green hydrogen strategy the country has added specific targets in terms of renewable capacity for green hydrogen projects. These targets include generating 16-20 GW by 2030, 65-75 GW by 2040 and 175-185 GW by 2050.

A challenge Oman faces is how to manage existing oil and natural gas assets that may be underutilised as the country shifts towards renewables. Hydrogen, however, can help alleviate risks associated with these assets by repurposing some of the transport and storage facilities initially developed for the oil and gas industry. With its extensive, 4000-km network of natural gas pipelines connecting key points such as the ports of Salalah, Sohar and Sur, Oman has a solid base to build upon for hydrogen transport. By leveraging its existing pipelines, Oman can reduce the cost of hydrogen transport and minimise the need for building new infrastructure.

OQ Gas Network, a subsidiary of government-run energy company OQ that owns and operates Oman’s gas pipeline system, is considering repurposing some existing infrastructure to enable hydrogen transport, according to a September 2022 report by logistics provider Asyad Group. One such piece of infrastructure is Marsa Liquefied Natural Gas (LNG), a company established in December 2021 when TotalEnergies signed a memorandum of understanding with the Ministry of Energy and Minerals. The joint venture will sell natural gas to the government from Block 10 of the Saih Rawl gasfield for 18 years, or until the low-carbon, solar-powered LNG plant in Sohar is completed.

It is expected that large pipeline systems will have to anticipate future demand for cost-effective transport over long distances, as was the case for natural gas. Larger pipelines are cheaper but require higher quantities of gas, necessitating the long-term predictability of supply and demand. This means ramping up capacity and quantity in a quasi-market fashion, and investing in new infrastructure over longer periods such as 20 years to avoid disproportionately high transport tariffs. Careful consideration should be paid to determine whether a policy-driven focus on green hydrogen in Oman’s energy mix, which will also include blue hydrogen and other types of greener energies in smaller quantities, can ensure sufficient overall hydrogen production.

The future success of green hydrogen lies in its potential to power new applications and decarbonise the production and supply of hydrogen. If production costs can be reduced by 50% by 2030, green hydrogen could become a key component in the future global energy mix. However, incentives are needed to develop Oman’s green hydrogen sector. These can include investment subsidies, production-linked incentives and tax credits to ensure the energy sector’s economic viability in its early stages. Such incentives can help reduce the production cost of green hydrogen and increase those associated with fossil fuel-based hydrogen. This will in turn facilitate the adoption of green hydrogen in industrial segments such as ammonia and methanol production, as well as in refining.


Oman has significant potential to become a major player in the global green hydrogen market based on its abundant solar and wind resources; existing assets for oil and gas transport, which could be retrofitted to service the hydrogen industry; and the country’s strategic location. However, in order for Oman to fully utilise these advantages and achieve its targets, careful planning and execution is essential.

To successfully develop a sustainable green hydrogen industry in Oman, the government and industry stakeholders should work together to create a supportive regulatory framework and incentives for investing in and producing green hydrogen. This includes ensuring fair and transparent regulations for the production, transport and export of hydrogen, as well as the provision of financial support for early-stage projects. Moreover, for Oman to establish itself as a reliable supplier of green hydrogen in the international market, close cooperation with potential buyers and partners will be required to understand their needs and develop supply chains that can deliver hydrogen at competitive prices.