2333
Views

IEA: Oman Could Become a Leading Green Ammonia Producer

Oman
Solar panel array in Oman (File image courtesy Shell)

Published Jun 12, 2023 6:02 PM by The Maritime Executive

The International Energy Agency believes that the nation of Oman could be one of the biggest green hydrogen and green ammonia suppliers in the world, given its abundant solar and wind resources.

Oman is better known for its oil and gas, and its ambitious targets are relatively unique for a country with a fossil-fuel dependent economy, according to IEA. It uses natural gas for 95 percent of its power generation, and petroleum exports account for 60 percent of its export income. Nonetheless, the nation has a goal of producing one million tonnes of green hydrogen by 2030 and 8.5 million tonnes by 2050 - enough to supply the current H2 demand for all of Europe. By 2030, rising green ammonia exports and replacement of fossil hydrogen could generate $2 billion in economic value, rising to double-digit billions over the following decades, IEA found. 

“Oman is an oil and gas producer country that is taking an enlightened approach to its energy future, with a clear long-term vision and strong net zero ambitions,” said IEA Executive Director Fatih Birol. "The IEA is very pleased to be working with Oman on policy and technical matters as the country moves ahead on its journey to a net zero economy and shows other producer countries what is possible.”

Oman has several factors in its favor for producing green hydrogen, which is the precursor for making transportable and tradeable green ammonia. The country has high-quality onshore wind and solar resources, access to seawater for desalination and electrolysis, and an abundance of uninhabited desert - perfect for building out tracts of turbines and PV arrays. So far it has set aside about 580 square miles of land for these projects, and another 19,000 square miles have been identified as potentially suitable. This is larger than Slovakia, and the vast space would be needed, since meeting the initial 2030 target would require doubling the size of the national electrical grid using renewables alone.

For location, Oman sits right on the key trade lane from Europe to Asia, making shipping easy. Its ports are already quite used to handling ammonia, the likeliest carrier for H2 exports - but it would need up to 30 times as much ammonia export capacity if it wants to become a major player in the trade. 

These benefits would come at a cost in capex. Total investments to reach the 2030 target would come to about $33 billion, plus additional funding if Oman wants to add renewable power to its own electrical grid.