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Oman's OQ aims to replace 40% of its 3 GW of power consumption with renewables

Highlights

Blue hydrogen, blue ammonia projects also under consideration

In discussions with offtakers for green hydrogen projects

Oman's OQ is looking to replace 40% of its 3 GW power consumption with renewable energy projects, to free up gas volumes to deploy elsewhere, Salim al-Huthali, CEO of Alternative Energy at OQ, told S&P Global Platts.

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"We are looking at solar projects and combined solar and wind on our plants," said Huthali, speaking on the sidelines of the Gulf Petrochemicals and Chemicals Leaders Forum in Dubai June 16.

"That will free up gas molecules that we are burning to employ into much more valuable processes rather than burning it for heat."

OQ, wholly owned by the sultanate, was created in 2019, and integrates several upstream, midstream and downstream oil and gas entities. The group has participating interests in four producing blocks, one non-producing block and five exploration blocks both onshore and offshore Oman.

Oman's Vision 2040 has set a target that 20% of the country's power generation should from renewables by 2030, and almost 40% by 2040.

OQ is looking to develop green hydrogen, green ammonia, green methanol and green steel projects, as well as blue hydrogen and ammonia. Some of these projects will be announced this year, Huthali said.

"We are doing both blue ammonia and blue hydrogen," he said. "The blue ammonia project can be accelerated quite quickly; it is a matter of capturing the CO2 and obtaining certification that it qualifies as blue ammonia and can be sold to the market as blue ammonia."

OQ is looking for international partners for these projects, Huthali said.

"We are feeding the funnel with a lot of projects. By their nature, some will go through, and some will not make it," he said. "We would love the injection of foreign direct investments, and in Oman we are known for developing projects with partners. We want to continue."

OQ in May announced a partnership with InterContinental Energy, the world's largest renewable hydrogen developer, and Kuwaiti government-backed energy investor and developer EnerTech, to launch a 25 GW project in Oman focused on green ammonia exports.

The Oman project, once at full capacity, would produce 1.75 million mt/year of hydrogen via electrolysis of water, which could make 9.9 million mt/year of green ammonia, the companies said. The project would be powered entirely by renewable energy, with approximately 16 GW of wind and 10 GW of solar capacity feeding 14 GW of electrolyzers in Al Wusta governorate in central Oman.

"For green hydrogen, we are renegotiating a few offtake agreements with global players," Huthali said.