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ENGIE and POSCO to develop green ammonia project in Oman

ENGIE is looking to become a net-zero company by 2045. (Image source: ENGIE)

Low-carbon energy provider ENGIE will collaborate with POSCO, a Korean steelmaker, to develop a 1.2mtp green ammonia project in Oman 

This will be done through a consortium created by the two companies, which will include partners such as 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 orchestrator and 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 is expected to be 2030.

In March 2022, POSCO and ENGIE signed an MoU to explore joint development opportunities for green hydrogen production and related infrastructure in the Middle East, Australia, and Latin America. ENGIE is looking to become a net-zero company by 2045, while POSCO is aiming to become a green hydrogen-based steel business by 2050.

The project feeds into ENGIE's aim of generating 80GW of renewable capacity and 4GW of electrolyser capacity by 2030. The project is also in line with Korea's national decarbonisation objective of a 40% carbon footprint reduction by 2030, and aids in realising Oman's Vision 2040 that centres around energy transition and industry diversification.

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 finalise the total capital expenditure requirement for the project. 

ENGIE’s country manager for GCC, Frederic Claux, said, “By joining forces with our consortium partners, we aim to unlock Oman's extraordinary renewable energy potential while capitalising on their expertise and capabilities. Ultimately, this collaboration propels ENGIE toward its global ambitions of attaining a hydrogen capacity of 4GW by 2030.”

Her Excellency Véronique Aulagnon, Ambassador of France to Oman, said, “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.”