A consortium led by POSCO Holdings Inc. and Samsung Engineering Co. has signed a 47-year contract with Oman worth an estimated $7 billion-$8 billion to build and operate green hydrogen production plants in the Middle Eastern nation, according to the consortium on Thursday.
The two South Korean companies joined hands with Korea Southern Power Co., Korea West-East Power Co., France’s Engie and Thailand’s PTT Exploration and Production to clinch the order. It marked the largest-ever overseas green hydrogen project secured by a group of South Korean companies.
They signed the contract with Oman’s state-owned hydrogen energy developer Hydrom, on Wednesday in Muscat, the capital of Oman.
The six companies will develop the project for the first seven years and then exclusively operate the plants for the following 40 years. The facilities will be located in Duqm, a port town in east-central Oman, about 450 km southwest of Muscat.
Duqm, marked in red, is an eastern port town in Oman (Google Maps) The contract is estimated at $7 billion to $8 billion, which will be split by the six companies participating in the consortium by their ownership ratio, said sources with knowledge of the matter.
It will be determined after the companies completed their feasibility study on the project.
In Duqm, the consortium will build a renewable energy complex to produce 5-gigawatt electricity per year, in which a green hydrogen plant and an ammonia-hydrogen blend plant will be constructed to produce 220,000 tons of carbon-free hydrogen annually.
The construction site, within the special economic zone in the town, measures 340 square kilometers, about half the land area of Seoul.
Their groundbreaking will take place in 2027 for completion by 2030.
Most of the green hydrogen to be produced at the Duqm facility will be processed into 1.2-million-ton ammonia-hydrogen blends and then transported to South Korea. They will be used as fuel to generate carbon-neutral electricity and steel products.
Green hydrogen is produced using renewable energy and a key carbon-free fuel source.
Oman aims to produce 1 million tons of green hydrogen per year by 2030.
To that end, the Middle Eastern country has received bids for six separate projects totaling $20 billion from international developers to build green hydrogen production facilities in the country.
Write to Hyung-Kyu Kim at khk@hankyung.com Yeonhee Kim edited this article.
