Oman’s Hydrogen Strategy: Adapting to Market Shifts and Its Implications for Investors and Businesses
MUSCAT, NOV 30 — Eng. Salim bin Nasser al Aufi, Oman’s Minister of Energy and Minerals, highlighted advancements in the country’s green hydrogen sector during his keynote address at the Energy Executive Circle, part of the Green Hydrogen Summit Oman (GHSO) 2025. He discussed the evolving dynamics of both domestic and global low carbon markets.
Al Aufi emphasized that Oman is making significant strides in key renewable and hydrogen initiatives, recognizing four organizations for their notable contributions to green energy development. Among them, OQ Alternative Energy recently received its initial shipments of wind turbines for its projects in Oman, enhancing logistical capabilities for future mobilizations.
Kawasaki Heavy Industries was acknowledged for its commencement of a major liquid hydrogen terminal in Japan, while India’s ACME Group was praised for progressing the first green ammonia project in Oman. This project is set to facilitate the export of ammonia via vessels powered by European offtakers. Al Aufi also commended the European Union for its role in fostering partnerships and developing hydrogen frameworks with Oman.
The Minister noted that Oman’s hydrogen strategy is purposefully designed to be flexible in response to shifting market conditions. The forthcoming land auction will prioritize smaller parcels in line with current market readiness, allowing developers the flexibility to phase projects, modify final product molecules, and choose between export and domestic routes.
While pricing presents a challenge, Al Aufi stated that the cost of green hydrogen has improved to approximately $3 per kilogram and is anticipated to decrease further. With abundant solar and wind resources, alongside prepared land and frameworks, Oman is well-positioned to scale rapidly as global demand rises, especially in light of expected sector transformations over the next five to ten years.
Earlier in the session, Dr. Abdullah al Abri, Vice President of Sustainability at SOHAR Port and Freezone, provided insights into the global hydrogen landscape. He remarked, “The global hydrogen economy is entering a decisive chapter. Demand is nearing 100 million tonnes, with projections indicating that it may substantially increase by 2050. This presents a historic opportunity for Oman, where plentiful low-cost renewables enable competitive green hydrogen production.”
Dr. Al Abri emphasized that while electrification continues to grow, clean molecules like hydrogen are vital for hard-to-decarbonize sectors, including steel, chemicals, shipping, and aviation. He pointed out that the industry is transitioning from ambitious goals to disciplined execution, centering on financially viable projects, reliable offtake structures, and stable investment frameworks.
“Oman is evolving from a resource-based economy to an integrated industrial platform,” he asserted, highlighting significant infrastructure developments in Suhar, Al Duqm, Salalah, and Sur. “These hubs will link today’s industries with future producers of green ammonia and low-carbon fuels, ensuring long-term industrial competitiveness.”
He concluded by stating that the forum serves as a critical platform for aligning capital, policy, and technology, translating insights into actionable steps that will bolster Oman’s position as a global hub for clean molecules.
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Oman’s progress in green hydrogen development presents significant opportunities for businesses to engage in a rapidly evolving low carbon economy, particularly given the country’s abundant renewable resources. As the demand for green hydrogen is projected to increase dramatically by 2050, smart investors should focus on partnerships and infrastructure development to capitalize on this burgeoning market, while also being cautious of pricing challenges that could impact profitability. Entrepreneurs must adapt to the flexible hydrogen strategy outlined by the government, ensuring their projects align with both domestic and global market dynamics.
