Strategic Rationale
Green hydrogen — produced by electrolysing water using renewable electricity — represents Oman’s most ambitious attempt to create a new export industry that leverages its natural resource endowments without dependence on hydrocarbons.
The strategic logic is compelling in principle: Oman has world-class solar and wind resources, available land in non-populated areas, deep-water port access at Duqm, and existing expertise in energy project development. If green hydrogen achieves commercial viability, Oman could become an energy exporter in the post-oil era, maintaining fiscal revenues and geopolitical relevance through the energy transition.
The Vision 2040 green hydrogen programme targets first commercial production by 2030, with scale-up through 2040.
Oman’s Competitive Advantages
Solar resource: Oman’s direct normal irradiance (DNI) and global horizontal irradiance (GHI) are among the world’s highest — comparable to the best solar sites in Chile, Morocco, and Australia. At utility scale, Oman can produce solar electricity at among the lowest global costs.
Wind resource: While less uniformly excellent than solar, Oman’s coastal areas and elevated terrain offer viable wind development. The combination of solar and wind reduces the intermittency of renewable generation, improving electrolyser utilisation rates.
Land availability: The vast interior and coastal areas of Oman (particularly around Duqm) provide developable land at low cost and without competing agricultural or population density pressures.
Duqm deep-water port: The Port of Duqm, with its deep natural harbour, is capable of handling ammonia tankers for export — a critical logistics advantage. Duqm is also outside the Strait of Hormuz, reducing geopolitical transit risk.
Existing project finance expertise: Oman’s energy sector has decades of experience structuring large project finance transactions, providing institutional knowledge applicable to green hydrogen project development.
Project Pipeline
Oman’s green hydrogen pipeline represents the most ambitious new energy industry creation effort in Vision 2040. As of early 2026, the pipeline includes:
| Project | Developer | Capacity | Status |
|---|---|---|---|
| Hyport Duqm | OQ/Shell/Uniper/Engie consortium | 1.25 GW electrolyser | Development/FEED |
| ACME Green Hydrogen | ACME Group (India) | 2.5 GW electrolyser | MoU/Development |
| OQ Green Ammonia | OQ Group (internal) | 500 MW electrolyser | Development |
| Additional projects (2024/25) | Various | TBD | MoU stage |
Total pipeline value: $30+ billion in potential investment across projects from MoU to development stage.
Hyport Duqm
Hyport Duqm is the furthest-progressed major green hydrogen project, developed by a consortium of internationally credible energy companies:
- OQ Group (Oman’s state energy company) — anchor Omani party
- Shell — global energy major, brings hydrogen and LNG project expertise
- Uniper — European energy company with off-take commitments
- Engie — French energy utility with hydrogen expertise
The project targets production of green ammonia (hydrogen carrier) for export to European markets, with production expected in the early 2030s. The Duqm Special Economic Zone provides land, utility connections, and regulatory support. OQ’s existing chemicals infrastructure at Duqm provides potential synergies.
ACME Group Project
ACME Group (India) has signed an MoU for a 2.5 GW electrolyser project in Oman, targeting production of green hydrogen and green ammonia for export to India and Europe. ACME has green hydrogen project experience in India and brings potential Indian market off-take relationships.
Additional Projects
Two additional green hydrogen investment agreements were signed in 2024/2025, as noted in the Progress Report — reflecting continued international investor interest despite the challenging economics. The specific projects were not publicly detailed at the time of the Progress Report publication.
Off-take Markets
Europe: The EU’s hydrogen import strategy — particularly German, Dutch, and Scandinavian demand for clean hydrogen to decarbonise heavy industry and heating — represents the primary export market aspiration. The EU-GCC clean energy partnership provides diplomatic support, though commercial off-take agreements remain limited.
India: India’s domestic green hydrogen target (5 million tonnes per annum by 2030) and Oman’s geographic proximity create a natural bilateral opportunity. India-Oman relations are strong (large Indian diaspora in Oman; Indian firms active in Omani infrastructure).
Japan and South Korea: Both countries have expressed interest in hydrogen imports from Middle Eastern producers. LNG trade relationships provide an existing commercial framework.
Risks and Challenges
Cost trajectory: Green hydrogen currently costs approximately 3-5x the cost of grey hydrogen (from natural gas). Achieving cost parity requires renewable electricity below $20/MWh and electrolyser capital costs below $500/kW — achievable trajectories but not yet reached.
Off-take uncertainty: Without binding long-term purchase agreements, project finance is extremely difficult. European off-take is contingent on EU regulatory frameworks (carbon border adjustment, hydrogen import incentives) that are still being defined.
Pipeline vs reality: The $30bn pipeline is dominated by MoU-stage commitments. Converting MoUs to Final Investment Decisions requires resolved off-take, financing, and regulatory certainty — a high bar that few projects globally have achieved.
Competitive landscape: Oman faces competition from Morocco, Chile, Australia, Saudi Arabia, and others — all targeting similar European and Asian markets with potentially superior cost positions (Morocco’s solar+wind combination; Australia’s land and European proximity).
Despite these challenges, Oman’s green hydrogen programme represents a credible strategic bet. Even if only a fraction of the current pipeline reaches FID, the first large-scale projects would establish Oman as a genuine green energy exporter — a significant diversification milestone.