Oman released its green hydrogen strategy in 2022, simultaneously establishing Hydrogen Oman (Hydrom), a government-owned private entity mandated to implement strategy and manage and attract investment in the country’s nascent hydrogen industries. The five strategic directions laid out in the Green Hydrogen in Oman policy document state that the development of Oman’s hydrogen sector should contribute to national and international energy security; aid economic diversification; help decarbonise economic activities; establish strong export markets and attract foreign direct investment; and support national innovation and local talent development. The strategy, which envisages Oman as a global leader in green hydrogen production and exports, ties in with the environmental sustainability component of Oman Vision 2040, the country’s overarching socio-economic development blueprint.
Land & Investment
Around 50,000 sq km of land, split between the central and southerly regions of Duqm, Al Jazir and Dhofar, has been allocated for green hydrogen and ammonia facilities. These areas were selected because of their constituent concentrations of industrial infrastructure and also their climatic conditions, namely an abundance of wind and sunshine, which provide strong opportunities for renewable energy generation. This renewable electricity can be utilised to produce green hydrogen through electrolysis, a process that splits water into hydrogen and oxygen with the use of an electric current.
Hydrom is in charge of management, apportionment and auction of the land. Significant private investment has been secured via a series of tender rounds, the first of which closed in 2023, having attracted a total investment of $30bn in five large-scale facilities that, between them, will produce 750,000 tonnes of green hydrogen per year. The second round launched and closed in 2024, with the three projects signed set to deliver 1.4m tonnes per year by 2030. The third round of tendering will launch in the first quarter of 2025, with deals expected to be finalised between the end of 2025 and early 2026. The government’s target green hydrogen production milestones are 1m tonnes by 2030, up to 3.8m tonnes by 2040 and to reach 8.5m tonnes by 2050. Provided the signed projects are delivered on time, the sultanate will exceed its 2030 production target, while a fruitful third tendering round could place it on course to meet its 2040 goals. Oman has also set the target of achieving 30 GW of electrolyser capacity by 2040, with deals signed during the first tender round set to supply half of that.
Transition Fuel
Green hydrogen is widely considered the fuel of the future; however, blue hydrogen plays a key role as a transition fuel in the global energy shift. Produced from natural gas with carbon capture, it supports the departure from oil by leveraging cleaner gas production to cut carbon emissions. Oman’s Ministry of Energy and Minerals announced in October 2023 that Oman Shell had been selected to spearhead the implementation of a blue hydrogen and ammonia plant in the Special Economic Zone at Duqm (SEZAD). Ammonia, produced by adding nitrogen to hydrogen, provides a stable and economically viable vector for transporting hydrogen. The facility is designed to supply low-carbon fuel to local industries, such as the country’s emerging green steel manufacturing segment, sections of the sultanate’s transport sector and also for export to international markets.
Carbon dioxide that is separated and captured from production at the above-detailed blue hydrogen plant will be stored by government-owned Petroleum Development Oman. Oman Shell has contracted with UK-based engineering firm Wood and US technology solutions provider KBR to develop the facility. Wood will design the plant, including the ammonia storage units, a 200-km pipeline and the CO₂ injection facility. Meanwhile, KBR will implement its ammonia synthesis loop technology and provide a proprietary engineering design for the 3000-tonnes-per-day ammonia plant.
New Technologies & Value Chains
New energy production practices necessitate the sourcing and integration of new technologies. Oman’s topography and geological characteristics present challenges in fossil fuel exploration and production, with the sultanate strategically engaging international operators in possession of the technologies required to extract oil and gas from problematic locations. Established partnerships with international energy-related tech developers and existing business frameworks designed to support such collaborations should benefit Oman’s bid to equip its clean energy value chains and industries.
The Port of Duqm and SEZAD were established to support the creation of new industries and export markets and are expected to play a central role in Oman’s hydrogen-related activities. The first round of Hydrom auctions saw a contract awarded to Hyport Duqm Consortium, which comprises Oman’s OQ Alternative Energy and Belgium-based DEME Concessions (DEME), for the development of Hyport Duqm, an export-oriented green ammonia production facility and seaport, which, once fully operational, will provide 2.7 GW of renewable energy and annual green ammonia production capacity of approximately 650,000 tonnes.
Furthermore, India-based ACME Cleantech Solutions expanded its existing land holding during the first Hydrom tendering round for the development of its 320 MW green hydrogen and ammonia facility in Duqm. The first phase of the development will see the facility produce 100,000 tonnes of green ammonia, all of which is subject to a 30-year offtake agreement set to begin in 2027 with Norwegian fertiliser and chemicals manufacturer Yara. Ammonia carrier ships will be loaded directly from the plant via a flexible pipeline and jetty. Subsequent phases of the project will raise production capacity to around 900,000 tonnes per year.
DEME is a member of HYVE, a consortium of European research and technology entities established to develop next-generation electrolysers. While ammonia provides a solution to the storage and transportation challenges associated with hydrogen, a 2023 report by the US-based Kleinman Centre for Energy Policy stated that the most advanced electrolysis technologies required approximately 48 MWh of power to produce one tonne of hydrogen, whereas one tonne of hydrogen stores 33.6 MWh of energy; a clear discrepancy. Since then, technological breakthroughs, such as advances in anion exchange membrane electrolysers – which harness water for electrolysis – and alkaline-powered electrolysers have been made. These advances are driven in part by increased global demand and suggest that green hydrogen production could soon become both viable and profitable. ACME announced in January 2025 that China’s Sungrow Hydrogen had been contracted to supply its new alkaline electrolysis technologies to power production at the aforementioned Duqm plant.
Export Opportunities
The International Energy Agency reported in June 2023 that Oman’s pipeline green hydrogen projects placed its expected 2030 export capacity of around 1.1m tonnes per year as the sixth largest in the world and the highest in the Middle East – around three times greater than Saudi Arabia and the UAE – representing 61% of the region’s projected export capacity. In addition, the sultanate’s strategically advantageous proximity to European and Asian markets presents significant export potential. The capacity of pipeline European green hydrogen projects is deemed sufficient to meet the continent’s demand until 2030. However, demand is forecast to spike between 2030 and 2050 as European nations race to meet net-zero commitments. Hydrom’s aforementioned export-oriented deals with Belgian and Norwegian operators display Oman’s intention to capitalise on that dynamic.
Regulation
The World Bank’s 2023 declaration that Oman’s sustainability regulations relating to national energy consumption practices and investment laws were the best in the MENA region and sixth-best globally suggests a degree of confidence among stakeholders and private investors. However, streamlining investment procedures could further support hydrogen industry development. Aside from an eight-article royal decree regarding lands allocated to green hydrogen production, components of green hydrogen projects are regulated under the country’s existing laws. Renewable energy production is subject to the Regulation and Privatisation of the Electricity and Related Water Sector Law of 2004, which requires producers, distributors or suppliers of electricity to obtain approval from the Authority for Public Services Regulation.
Meanwhile, green hydrogen electrolysis activities and facilities are regulated by the Ministry of Commerce, Industry, and Investment Promotion. As Oman continues to position itself as a global leader in green hydrogen and renewable energy, the evolution of its regulatory framework will play a crucial role in unlocking further investment and innovation. By building on its strong foundation and streamlining policies to support emerging industries, the sultanate is well-placed to accelerate its clean energy transition and attract longterm partnerships to drive sustained economic growth.
