To achieve this production target, Oman has earmarked two blocks in Duqm, on the east coast of Oman, and four more blocks in Salalah, each 320 km² in area, are to be announced for development. The Duqm block will be floated on 6 November with the expectation of award in March 2023, while the Salalah block will be sold in April 2023 with the aim of announcing the award before the end of the year. Oman aims to increase green hydrogen production from 32,500 to 3.75 million tonnes per year by 2040 and from 3.5 to 8.5 million tonnes per year by 2050. The country estimates that it will need a cumulative investment of $140 billion over this period to reach its production target by 2050.
In total, the Sultanate has selected three regions in central and southern Oman for green hydrogen production: Duqm, Dhofar and Al-Jazir. The hydrogen produced will satisfy domestic demand and will be exported, with Europe and Asia being the most feasible and potential buyers. As part of its hydrogen strategy, Oman has also created a new state-owned company, Hydrogen Oman (Hydrom). The new entity, previously called Hydrogen Development Oman (HDO), will be a subsidiary of the state-owned Energy Development Oman (EDO). Hydrom will be regulated by Oman's Ministry of Energy and Mines.
Hydrom's responsibilities include the demarcation of large tracts of state-owned land and the construction of associated large-scale green hydrogen projects. It will work closely with the Special Economic Zones and Free Zones Administration (OSZ) to manage the allocation of projects to sponsors and promote the development of common infrastructure and related industry and ecosystem centres. Similar decisions are being made by the Gulf oil states.
Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates and Oman, the six Gulf Cooperation Council (GCC) countries that hold nearly a third of the world's oil reserves and about a fifth of its natural gas reserves, are not only shifting their focus to renewables, but also their projects and investment plans to decarbonise. These countries have the highest levels of solar radiation in the world, have abundant solar energy resources and are developing and striving to become the world's largest solar energy resources.
As a strategy to effectively mitigate climate change, the GCC countries see themselves as pioneers in the hydrogen economy and have announced ambitious plans to supply Europe and the Asia-Pacific region with green, low-carbon fuels. Regarding fossil fuel power plants, the UAE and Saudi Arabia have committed to zero greenhouse gas emissions by 2050 and 2060. Achieving this important goal will require a roadmap that includes wind and photovoltaic renewables, as well as hydrogen. As an energy carrier, hydrogen can play a key role in the successful decarbonisation of the most challenging sectors, such as shipping, aviation, steel and chemicals.
Replacing some fossil fuels with hydrogen would be a major step towards reducing greenhouse gas emissions, as required by the Paris Agreement, the 2015 international agreement on climate change mitigation, finance and adaptation. Looking ahead, Gulf States are exploring ways to diversify and decarbonise their economies. The NEOM green hydrogen project will come online in 2026 and will be the world's largest green hydrogen plant. It will be powered entirely by renewable energy and will have a production capacity of 650 tonnes of hydrogen per day. It was developed by Saudi Arabian energy operator ACWA Power. In addition, the Saudi kingdom continues to develop a clean and safe nuclear energy programme in accordance with International Atomic Energy Agency regulations.
The world's largest oil exporter is trying to diversify its energy sources away from hydrocarbons and decarbonisation. The Sudair solar power plant is the first project in the Saudi Arabia Public Investment Fund's renewable energy project. The plant is owned by energy giants ACWA Power and Aramco and energy holding company Badeel. The Kingdom plans to move away from oil for electricity generation. It also plans to increase the share of natural gas and renewables in its energy mix to 50% by 2030.