Construction work begins on Oman’s first green ammonia project

Green energy: First molecules targeted for export by mid-2025

MUSCAT, DEC 14

Construction work has commenced on Oman’s first green ammonia project, underscoring the aggressive pace at which a new green hydrogen industry is set to materialize in support of the nation’s decarbonisation strategy.

Green Hydrogen and Chemicals Company (GHC), a joint venture between the UK unit of Indian energy developer ACME Group and Norway-based Scatec ASA, a leading renewable energy solutions provider, is developing the country’s maiden green energy venture at the Special Economic Zone in Duqm.

Phase 1, powered by around 500 MW or renewables, targets the production of 100,000 metric tonnes per annum of green ammonia. In the second phase, green ammonia output is anticipated to grow 12-fold to around 1.2 million metric tonnes annually.

Giving an update on the project, a top official of ACME Group said a number of consultants and contractors are currently engaged in the implementation of the project on the ground in Duqm.

“We have already started the basic construction work even as our final financial closures are going to be sanctioned in a matter of weeks, hopefully before Christmas, but if not, then possibly in January 2023,” said Rajat Seksaria, CEO – ACME Group.

“The approach we have taken is very disruptive; we are not waiting for a classical FID (Final Investment Decision), but using an entrepreneur approach, we are putting in our own equity until we get the final financial closure done,” Seksaria stated.

Speaking at the Green Hydrogen Summit Oman 2022, which was held in Muscat last week, the official noted that initial capex costs totaling in excess of $150 million to date have already been expended or committed towards the project.

“Specifically for this first phase, we already either spent or given commitments in the form of POs (purchase orders) totaling around $40 million and LoIs (Letters of Intent) for around $111 million, and this doesn’t take into account all the other overheads towards business development that we’ve being spending. So we really want to speed up because we want to ship out the first molecules, ideally by end-2024, but we have kept open a window to achieve this certainly by the first half of 2025. That’s why we are working 24×7 on this project.”

To underpin the overall viability of the project and its eventual bankability, ACME Group developed a pilot scheme at its facilities in the northwestern Indian state of Rajasthan. The facility, serving as a “test-bed” for the Oman venture, was visited by Omani officials, as well as experts from countries around the world, he noted.

In addition to renewables and electrolyzer components, the Oman project will also feature a desalination plant, hydrogen unit, ammonia storage facility and transportation components. Some battery capacity is envisioned as well, he said.

“We have already signed the usufruct agreement with Oman’s authorities last year; the offtake term sheet (with Norwegian based ammonia distributor Yara) has been signed and a final agreement will be signed in a matter of weeks,” Seksaria added.