Manufacturing


Issue 77. Vol 1- (NOVEMBER 2022)


Oman manufacturing shifts to a green strategy

The country is set to unlock its green hydrogen and renewable energy potential as a global initiative to support energy transition grows. 

Oman is eyeing the green hydrogen industry, which will add a fresh revenue stream to the country’s burgeoning industrial sector.

The sector could attract USD 140 billion in the new low-carbon energy industry as the Sultanate gears up to become one of the world’s largest green hydrogen producers and exporters, targeting production of one million tonnes by 2030.



“Green hydrogen presents itself as a key vector that enables Oman to pursue its decarbonisation, economic and energy security objectives,” said Eng. Salim bin Nasser Al Aufi, minister of energy and minerals. “With the abundant renewable energy resources Oman is blessed with, and with the appropriate structuring of the sector, Oman is positioned as one of the most attractive nations to produce green hydrogen competitively and at large-scale.”

The country’s Energy Development Oman also announced a new brand identity of HYDROM, a fully autonomous subsidiary of EDO, which is charged with executing Oman’s hydrogen strategy. HYDROM will soon open a first public bid round aimed at awarding the first land blocks by 2023 to meet the 2030 production target.

The company will work in tandem with the ambitious government plans, and leverage Oman’s location and abundant solar and wind resources to produce green hydrogen and support the government’s drive to reduce carbon footprint and achieve decarbonisation targets.

“Regulated by the Ministry of Energy and Minerals, HYDROM’s mandate includes the delineation of government-owned land areas and the structuring of associated large-scale world-class green hydrogen projects, managing the process for their allocation to developers as well as facilitating the development of common infrastructure and connected ecosystem industries and hubs, in close collaboration with the Public Authority for Special Economic Zones and Free Zones (OPAZ),” according to Oman News Agency.

The focus on low-carbon and clean tech industries is emerging as a new growth area for the country, but also requires development of local talent.

In October, Oman’s OQ signed a memorandum of understanding with the German University of Technology in Oman (GUtech) to explore partnership in areas related to supporting innovation, research, and development projects involving GUtech students. The MoU supports co-operation between Marafiq and GUtech in renewable energy projects, including water technology, which contributes to strengthening the Sultanate’s efforts to invest in clean energy and reduce carbon emissions.

OMAN AS A ‘MEGA HUB’

Oman’s non-oil industrial sector is growing at a fast clip. The country’s industrial activities rose 25.1% in the first six months of the year, according to gross domestic product data. Manufacturing sector alone expanded 67.4%, while other manufacturing industries rose 31.3%.

And the industry is growing with major corporations eyeing Oman.

Brazilian mining giant Vale picked Oman as one of its three locations in the Middle East to study the feasibility of developing industrial complexes, or mega hubs. The other two locations are UAE and Saudi Arabia.

Vale is seeking to co-operate in the development of these mega hubs to produce hot briquetted iron (HBI) and steel products, to supply both the local and seaborne markets with significant reduction of CO2 emissions.

“We see a great potential in the direct reduction route, with the demand for these high-grade agglomerated products growing 100 Mt in the next 15 to 20 years,” said Marcello Spinelli, Vale’s executive vice president, Iron Ore. “We shall structurally increase our supply of these highly valuable agglomerated products over the next years, improving the value of our product portfolio. We strongly believe that the Middle East, with its competitive energy prices, strategic location and entrepreneurial mindset, has a unique set of conditions to successfully develop these integrated hubs.”

The production of HBI using natural gas emits around 60% less CO2 than pig iron production through the integrated route. In the future, the replacement of natural gas by hydrogen and the use of renewable energy could totally eliminate carbon emissions.

“Vale is expected to build and operate concentration and briquetting plants within the hubs, providing secure supply of high-grade agglomerated products. Local parties are expected to promote the construction of the required logistics infrastructure,” the company said. 

“Investors and/or clients are expected to construct and operate the direct reduction plants and be off takers of HBI for either the export or domestic markets. These mega hubs shall supply different markets across the globe supporting the decarbonisation of the steelmaking industry.”


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