Oman, through Hydrom, the national orchestrator of its green hydrogen strategy, has awarded two integrated green hydrogen projects in Duqm under its third auction round, with a combined planned production capacity of approximately 121,000 tonnes of green hydrogen annually by 2032.

Announced during COP31, the agreements mark another step in Oman's efforts to expand its green hydrogen industry, diversify downstream production and strengthen the commercial foundations of its energy transition. The projects will introduce green ammonium nitrate production alongside additional green ammonia capacity, broadening the country's hydrogen-based industrial portfolio.

Building on the latest auction results, Hydrom has also launched its fourth auction round, introducing an investment opportunity that connects renewable energy and green hydrogen production with the growing electricity requirements of data centres.

The first agreement was signed with a consortium comprising Oman's Petrogas E&P and Italy's Bio3Energy Srl. The second involves PLN Indonesia Power Renewables of Indonesia, Oman's Alawi Enterprises and Singapore's HBA Offshore International PTE.

Eng. Abdulaziz Said Al Shidhani, Managing Director of Hydrom, said: "The development of international hydrogen markets will be driven by demand and commercial competitiveness, not production targets alone. For Oman, our priority is to ensure that projects remain competitive as these markets develop, supported by an investment framework that responds to market conditions and the infrastructure needed for large-scale production. At the same time, expanding green ammonia production and developing downstream industries and domestic applications is essential to creating long-term economic value for Oman, alongside our ambitions for hydrogen exports."

Commenting on the successful conclusion of the third auction, Al Shidhani said, “The successful conclusion of Round 3 is particularly significant because it reflects our willingness to listen to investors and respond to changing market conditions. We took the lessons from earlier auctions and translated them into a more flexible and competitive offering. Welcoming two new consortia today gives us further confidence in that approach, and our priority now is to support their progress toward investment decisions and delivery.

He added, “With Round 4, we are applying the same market-led thinking to a different opportunity. We see growing demand for reliable electricity from the digital economy, and we believe Oman can bring together its renewable resources, green hydrogen capabilities and connectivity to serve that market. Creating demand at home alongside international markets will strengthen the commercial foundations of our hydrogen industry and open new opportunities for investment in Oman.”

Green ammonium nitrate production

The project awarded to Petrogas E&P and Bio3Energy will introduce green ammonium nitrate as a new downstream product in Oman's hydrogen portfolio, extending production beyond green ammonia and targeting applications in the fertiliser and mining sectors.

The development aims to produce approximately 625,000 tonnes of green ammonium nitrate annually by 2032, supported by around 50,000 tonnes of green hydrogen production each year. It will utilise 1.16 GW of renewable energy capacity across a 100-square-kilometre site. The agreement also provides an option for future expansion through the reservation of an additional 100 square kilometres of land.

Kingsuk Sen, CEO of Petrogas Group, speaking on behalf of the consortium, said: “This agreement marks an important milestone in supporting Oman's ambition to become a global leader in green hydrogen. We are proud to partner with Bio3energy, whose experience in renewable energy and clean technologies complements our own capabilities and strengthens our ability to advance this project. We look forward to working closely with our consortium partners and Hydrogen Oman (Hydrom) to create sustainable, long-term value for Oman, in line with Oman Vision 2040 and the Sultanate of Oman's commitment to achieving net-zero emissions by 2050.

Green ammonia export project

The second agreement will see PLN Indonesia Power Renewables, Alawi Enterprises and HBA Offshore International PTE develop an integrated green hydrogen and ammonia production facility across a 100-square-kilometre site in Duqm.

The project targets annual production of approximately 400,000 tonnes of green ammonia for export by 2032. It will be supported by around 1.45 GW of solar power generation capacity and 1 GW of electrolysis capacity.

Hendry Asdayoka Putra, President Director of PT PLN Indonesia Power Renewables, representing the consortium, said: "We are honoured to sign these agreements with Hydrom. Oman has set out one of the clearest green hydrogen frameworks in the world, and Duqm offers the solar and wind resource, the port and the industrial base to deliver it. Together with our partners HBA Offshore International and the Zawawi Group, one of Oman's longest-established business groups, we aim to build Omani skills, Omani suppliers and new industries in Duqm. This project is a bridge between Indonesia and Oman in the energy transition, and we are committed to it for the long term."

Investor-focused auction framework

The two projects were awarded under a revised framework introduced in Round 3, incorporating feedback from previous auctions and market consultations to improve flexibility, bidder participation and commercial competitiveness.

Developers were given greater flexibility to determine their project footprints within land blocks of up to 300 square kilometres, subject to a minimum project area of 100 square kilometres. The bid preparation period was also extended to nine months.

Hydrom introduced targeted fiscal incentives to improve early-stage project economics and support investment decisions. These include a 90% reduction in land lease fees during the development phase, the possibility of further relief during Front-End Engineering Design (FEED), reduced base royalties during the initial production years and corporate tax exemptions of up to ten years.

The measures are intended to improve project viability and help developers progress towards final investment decisions amid evolving global hydrogen market conditions.

Fourth auction targets data centre demand

Under Round 4, Hydrom is introducing the Green-Powered Data Centre Hydrogen Auction in Dhofar, creating investment opportunities across renewable energy, hydrogen production and digital infrastructure.

The initiative will connect renewable energy and green hydrogen production with the electricity requirements of data centres, positioning these facilities as anchor offtakers. The approach is designed to establish domestic demand for hydrogen while supporting reliable electricity supplies for energy-intensive digital operations.

Registration for expressions of interest is open until February 2027.

Dr. Seema Al Kaabi, Director General for Sector Stimulations and Future Skills at the Ministry of Transport, Communications and Information Technology, said: "Oman has established a strong base of international connectivity, and we are now working to expand the country's capacity to accommodate large-scale AI and cloud computing operations under the umbrella of Oman Digital Triangle. For data-centre investors, power availability, reliability and long-term operating costs are fundamental to decisions on where to establish these facilities. Our close cooperation with the Ministry of Energy and Minerals and Hydrom will allow us to address these requirements as part of a coordinated investment offering, supporting the development of green computing infrastructure and the next phase of Oman's National Digital Economy Program. Providing hydrogen firming as an additional energy option for data centres in Oman, along with renewable energy and grid electricity, offers investors more options to meet their energy needs through clean and sustainable sources.”

Progress towards commercial production

Alongside its latest investment announcements, Oman is preparing to begin its first commercial-scale green hydrogen production in 2027.

Construction is underway on the first phase of ACME Group's green hydrogen and ammonia project in Duqm, with production expected to commence next year.

Hydrom is also progressing the development of shared hydrogen infrastructure to support the sector's expansion. Master planning and pre-FEED activities have been completed, while FEED studies are currently underway to prepare for the next stages of infrastructure development.

The latest awards and the launch of Round 4 reflect Oman's broader strategy to develop an integrated hydrogen industry, combining export-oriented production with downstream manufacturing and emerging domestic energy applications. -OGN/TradeArabia News Service