ENGIE, POSCO to develop green ammonia project in Oman

ENGIE together with steel producer POSCO have announced their joint role in a consortium to mobilise Oman’s renewable energy resources through the development of a 1.2mtp green ammonia project.

Other partners in the consortium include Samsung Engineering, Korea East-West Power Co. (EWP), Korea Southern Power Co. (KOSPO), and FutureTech Energy Ventures Company Ltd. (a subsidiary of PTTEP).

The ENGIE and POSCO led-consortium has been named the winner of land block (Z1-02) offered by Hydrom, the master planner of Oman's green hydrogen industry. Spanning 340 sq km, the concession block is located in Duqm, with downstream elements to be established at the Port of Duqm.

The land block will include a total renewable energy capacity of approx. 5GW which comprises wind and solar power, in addition to battery energy storage (BESS) and a hydrogen plant that will produce 200 kilotons per annum (ktpa) of green hydrogen. The hydrogen will then be transported by a pipeline to the Special Economic Zone at Duqm where it will be converted into approximately 1.2 million tons per annum (mtpa) of green ammonia for export. The Commercial Operation Date (COD) is expected by 2030.

"This venture marks a significant leap forward in its worldwide dedication to expediting the transition to low-carbon energy. With presence in Oman for more than a quarter-century, we reaffirm our unwavering commitment to supporting the energy transition in the country and the region. By joining forces with our consortium partners, we aim to unlock Oman's extraordinary renewable energy potential while capitalizing on their expertise and capabilities. Ultimately, this collaboration propels ENGIE toward its global ambitions of attaining a hydrogen capacity of 4GW by 2030." expressed Frederic Claux, Managing Director Flexible Generation & Retail, AMEA and Country Manager GCC from ENGIE.

In March 2022, POSCO and ENGIE signed a Memorandum of Understanding (MoU) to explore joint development opportunities for green hydrogen production and related infrastructure in the Middle East, Australia, and Latin America. This venture symbolizes a continuation of their combined efforts and a monumental stride in ENGIE’s quest for net-zero carbon by 2045 and POSCO’s ambition for a green hydrogen-based steel business by 2050.

Her Excellency Véronique Aulagnon, Ambassador of France to Oman, said: "France, as part of the European Union, and Oman share a common ambitious target to achieve carbon neutrality by 2050. France commends the remarkable leadership by the Sultanate of Oman to scale up renewables in its energy mix and develop a strong green hydrogen portfolio. As the French Ambassador to Oman, I am delighted to see a major French company, Engie, who has been active in Oman for over two decades, become a part of this transformative venture in the Sultanate of Oman and confirm its position as a key player in the global energy transition. I am confident that this collaboration will yield significant results in terms of sustainable development and job creation”

The project contract will last for a period of 47 years, broken down into a seven-year development and construction phase followed by a 40-year operational period, and is set to roll out within a month of the contract signing. Construction is projected to begin in 2027, with the first shipment of green ammonia to Korea planned for the second half of 2030, thereby marking a significant step in sustainable development. The consortium will carry out the feasibility and technical studies, in order to finalize the total capital expenditure requirement for the project.