BP’s Continued Commitment to Hyport Duqm Green Hydrogen Project: Implications for Investors and Entrepreneurs in Oman
MUSCAT: Hydrogen Oman (Hydrom), the key player in the Sultanate of Oman’s green hydrogen sector, has clarified that while energy giant BP has withdrawn from one major investment, it remains committed to another project in the region.
In a statement, Hydrom emphasized its role as the national orchestrator of Oman’s Green Hydrogen Strategy and its authority, granted by Royal Decree, to contract with developers on behalf of the Government of Oman. The organization confirmed that BP has concluded its involvement in the Duqm Green Hydrogen Project as part of a global portfolio realignment. However, BP continues to play an essential role in Oman’s energy transition through its participation in the Hyport Duqm project and other energy investments within the Sultanate.
Hydrom indicated that BP’s exit from the Duqm project, along with the cancellation of another initiative, represents a mutually agreed decision. “This conclusion followed a comprehensive assessment of global renewable hydrogen offtake dynamics and investment frameworks,” the statement read. Hydrom expressed appreciation for the partnerships formed through both projects and reassured that these changes do not alter the foundation of Oman’s hydrogen strategy or the robustness of its national framework.
The entity also noted that the remaining seven awarded projects are on track and progressing according to their established timelines. Among these, the ACME Duqm Project has officially commenced Phase 1 of construction, aiming for an initial annual output of 100,000 tonnes of green ammonia and 17,000 tonnes of green hydrogen, with a scalable plan to reach 1.2 million tonnes annually in future phases.
In an interview with Sultanate of Oman TV, Eng Abdulaziz bin Saeed al Shidhani, Managing Director of Hydrom, reiterated that Oman’s green hydrogen projects are advancing under a well-defined contractual and timeline structure, ensuring economic viability and fostering an attractive investment climate. He emphasized that this phased execution strategy enhances investor confidence and reinforces Oman’s position as a regional hub for the production and export of green hydrogen.
“Once a project agreement is signed, investors are allotted a seven-year period for development. The first three and a half years are focused on preliminary activities, including field measurements, engineering design, and securing an offtaker for the final hydrogen product,” Eng Al Shidhani explained.
“Following the Final Investment Decision (FID), financial and technical resources are designated for on-ground project execution, with the remaining three and a half years allocated for construction. Each project is granted a forty-year production term upon entering commercial operation, allowing for manufacturing, marketing, and revenue generation from hydrogen.”
Regarding concerns about energy loss during hydrogen transport, Al Shidhani addressed the issue: “The solution lies in converting electricity into hydrogen or its derivatives, such as ammonia, for transport, and then reverting it to its original form when needed. While energy loss occurs during the conversion processes, exact percentages are currently uncertain and vary without definitive verification.”
He concluded by saying that this strategic option will benefit importing nations and is particularly significant for Oman, drawing on the national experience with LNG exports. “We are confident that developing the hydrogen value chain is the most sustainable long-term strategy, and we are actively collaborating with our partners to demonstrate its technical and economic viability.”
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The recent developments in Oman’s green hydrogen sector signal a resilient investment landscape, despite BP’s exit from the Duqm project. Smart investors should keenly evaluate opportunities in the remaining seven projects, particularly the ACME Duqm Project, which is poised to enhance Oman’s position as a regional hub for green energy. While BP’s withdrawal indicates a realignment in global energy strategies, the ongoing partnerships and structured frameworks bolster the potential for long-term growth in Oman’s hydrogen economy.
