Duqm HBI Project Secures Full Output Buyers: What This Means for Investment Opportunities in Oman
MUSCAT, FEBRUARY 28 — Meranti Green Steel has secured full offtake agreements for the entire output of the first module of its planned hot briquetted iron (HBI) plant in Duqm. The agreements cover the full production capacity of 2.5 million tonnes per year, marking a significant step forward as the project advances into financing and delivery phases.
In a recent update, the Singapore-based developer revealed that the long-term contracts allocate 1.0 million tonnes per annum to Thyssenkrupp Materials Trading and 0.25 million tonnes per annum to INTERFER Edelstahl & INTERFER Austria. The remaining volume will be distributed to Glencore and Meranti’s own downstream operations at its emerging steel facility in Rayong, Thailand, where green hot rolled coil production is ramping up.
These agreements include essential commercial terms such as pricing frameworks, product specifications, and delivery schedules. They also include provisions for potential additional volumes connected to a prospective second HBI module in Oman, contingent on meeting certain conditions.
Meranti Green Steel CEO Dr. Sebastian Langendorf emphasized that the blend of major international traders and internal demand via the Thailand steel operations helps mitigate early-stage risks and broadens market access. This offtake structure supports the company’s plan to reach a Final Investment Decision (FID) by mid-2026.
Thyssenkrupp Materials Trading will target markets in Germany, Belgium, and the Netherlands, while INTERFER’s volumes are focused on Italy and Austria. Glencore will serve other destinations. The strategy positions Duqm’s HBI as a low-CO₂ iron feedstock tailored for electric arc furnace (EAF) steelmaking—an increasingly important sector due to growing decarbonization efforts and stricter emissions reporting standards in key importing countries.
Dr. Langendorf highlighted the Duqm project as a critical component of Meranti’s broader value chain supporting its downstream ambitions in Thailand. While Thailand primarily uses scrap steel, high-quality products require HBI feedstock, making Oman a strategic source.
On energy transition, Langendorf outlined a phased approach: the initial plant will operate on a gas-based model supplemented with some green hydrogen, gradually increasing the hydrogen share as supply infrastructure and market conditions evolve.
Financing remains the next major focus. Meranti is structuring a funding package combining international and local investors. A banking consortium led by KfW IPEX-Bank is arranging financing, with the company pursuing export credit agency (ECA) support to enhance competitiveness. Negotiations with three local banks for a local debt component are ongoing, with EY advising on equity structuring.
Meranti’s commercial strategy hinges on securing reliable demand and maintaining cost competitiveness through a phased energy transition. With offtake agreements now in place, the company will concentrate on achieving financing closure, preparing for execution, and confirming utilities and delivery schedules—key milestones for progressing from planning to construction.
Meranti Green Steel’s Duqm project is poised to become a cornerstone in the global shift towards low-carbon steel production, linking Omani resource advantages with Southeast Asia’s growing industrial demand.
Special Analysis by Omanet | Navigate Oman’s Market
Meranti Green Steel’s full offtake coverage for its Duqm HBI plant signals a strategic entry into the low-CO₂ steel supply chain, positioning Oman as a critical hub in the decarbonizing global steel industry. Businesses and investors should view this as an opportunity to engage in sustainable industrial growth, leveraging Duqm’s evolving infrastructure and the anticipated phased integration of green hydrogen. Smart investors must now focus on financing milestones and local partnerships, as securing competitive funding and execution readiness will be pivotal for the project’s success and long-term market influence.
