(Bloomberg) -- Oman still sees a bright future for green hydrogen and plans to become a major supplier, despite a number of projects to produce or import the fuel in other countries being delayed or scrapped.
Hydrom, the government agency responsible for overseeing green hydrogen development in Oman, will start auctioning off a third package of land for projects in the first quarter of next year, Chairman Salim Al-Aufi said in an interview on Wednesday. The country expects the first exports in early 2030.
Green hydrogen — made by using clean power to split water into hydrogen and oxygen — was seen as a key way for industries and governments to hit climate targets. But worries about the absence of buyers willing to pay a premium for hydrogen and ammonia produced from renewable sources, and a lack of infrastructure to import the fuel, is threatening projects.
Norway’s Equinor ASA recently shelved plans for a pipeline to Germany, and Denmark delayed the start of a similar link until next decade. Norsk Hydro ASA in November decided to shutter its green hydrogen businesses.
Still, Oman expects there to be demand for the fuel.
“We’re doubling down because we think the market will respond and we don’t want to be taken by surprise when it happens,” said Al-Aufi, who’s also Oman’s energy minister. “What’s happening today is not necessarily an indication of the long-term trend, which we believe hasn’t changed.”
He said visits to potential customers showed they’re still carrying out activities such as building pipelines and receiving terminals. While that’s “not at the scale we were thinking at the beginning,” the work has continued, he said.
None of the projects lined up in Oman’s first two auctions have secured buyers or reached final investment decisions, but the sector should gain momentum once the first supply agreements are signed, Al-Aufi said.
Major European fertilizer maker Yara International ASA earlier this year agreed to buy green ammonia from India’s Acme Group. The shipments will come from Yara’s project in Oman, which was negotiated before Hydrom started its formalized auction process, it said at the time.
There’s unlikely to be a final investment decision for any of Hydrom’s projects before late 2026, according to Al-Aufi.
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