London — The world's largest renewable hydrogen developer, InterContinental Energy, has launched a 25-GW project in Oman focused on green ammonia exports, adding to its 26-GW project in development in Australia, the company said in a statement May 18.
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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 company told S&P Global Platts.
The project would be powered entirely by renewable energy, with an approximately 16-GW of wind and 10-GW of solar capacity feeding 14 GW of electrolyzers in Al Wusta governorate in central Oman.
"This is a huge milestone in our mission to deliver cost-competitive zero-carbon fuels at unprecedented scale to meet rapidly growing global demand across sectors," InterContinental Energy Co-founder and President Alicia Eastman said in the statement.
The first phase of the project, around a third of the total capacity, is planned to come online around 2032, with full capacity reached around 2038. A final investment decision is expected around 2026, with the first offtake agreements due to be in place by 2024.
InterContinental Energy is partnering in a consortium with Oman's national energy investment company OQ and Kuwaiti government-backed energy investor and developer EnerTech on the project.
The renewable power infrastructure would be spread across Al Wusta to optimally situate turbines and solar panels. Hydrogen production could be dispersed or centralized, though ammonia production would likely be carried out on the coast, Eastman said.
The company is targeting hydrogen production costs of below $2/kg on a full project basis, and is assuming 2% a year decline in electrolyzer costs. However, Eastman said this was a conservative estimate.
"Just like wind and solar, where our predictions were so conservative for what really happened, I think it's the same with electrolyzers. But you have to be conservative," she said.
InterContinental's strategy is based around producing renewable power on a massive scale at prime global locations. The company has identified several coastal desert regions with access to the water required for electrolysis.
The consortium has been conducting wind and solar monitoring analysis in the region since 2019.
"Oman was at the top of the list when we looked at the world and where were the ideal places to build these projects, due to that optimal diurnal profile of sun during the day and wind at night," giving a capacity factor of around 70%, Eastman told Platts.
Renewable power would also be used in the desalination process, Eastman said.
"What makes desalination so expensive is the cost of power. So when you have wind and solar that cost pennies, it makes your desalination costs almost nothing as well. On top of that, they are coming out with electrolyzers that can use salt water, so desalination may not be necessary," she said.
The project is export-oriented, and InterContinental is already in early offtake discussions.
"We have indications of interest from quite a few parties," Eastman said. "Because we have so many different projects in the InterContinental Energy portfolio, that's actually really attractive to a number of offtakers because they like the depth of market, they like the geographic diversity, and it allows them both risk management and relationship consistency."
Eastman wants to keep the company's options open for end uses.
"All of our sites have the option of selling either hydrogen or ammonia," she said. "And we do still want to keep that open as long as we can because there is the possibility that there could become a hydrogen carrier other than ammonia that actually makes financial sense.
"But at this point, right now, from all that we know, ammonia is definitely the least expensive carrier. And the markets are there for ammonia. So it makes a lot of sense to focus on ammonia, at least for these first phases."
The project's location in the Middle East means it is well situated to serve export markets in both Europe and Asia.
Platts assessed the cost of producing hydrogen via alkaline electrolysis in the Netherlands (including capex) at Eur4.31/kg ($5.24/kg) and at $5.29/kg in Japan on May 17.
Ammonia is seen as a key potential fuel for decarbonizing the shipping industry, and the location made regional ship fueling a possibility, Eastman said.
The project adds to the 26-GW export-oriented Asian Renewable Energy Hub in Australia, where the company is pursuing a similar strategy of focusing on green ammonia production for export, primarily to Asian industrial markets looking to decarbonize.
"Australia could potentially service the West Coast US," Eastman said.