Home / Metal News / [SMM Analysis] Accelerated Implementation of Oman's Green Hydrogen Strategy: National Ambitions and Industrial Realities Behind the Commencement of Shuangliang-ACME Project

[SMM Analysis] Accelerated Implementation of Oman's Green Hydrogen Strategy: National Ambitions and Industrial Realities Behind the Commencement of Shuangliang-ACME Project

iconJun 5, 2025 20:24
Source:SMM
Oman's Green Hydrogen Strategy Accelerates Implementation: National Ambitions and Industrial Realities Behind the Commencement of Shuangliang-ACME Project —Focusing on Green Ammonia Projects Under $5 Billion Investment and Localization Challenges On June 1, 2025, at the Duqm Special Economic Zone in Oman, the million-mt-scale green ammonia project, a joint venture between China's Shuangliang Group and India's ACME Group, officially broke ground. This mega-project, costing $1.7 billion, marks a critical turning point for Oman's national hydrogen energy strategy, transitioning from paper planning to large-scale implementation.

On June 1, 2025, in the Duqm Special Economic Zone of Oman, the million-ton-scale green ammonia project by China's Shuangliang Group and India's ACME Group officially broke ground. This $1.7 billion mega-project marks a critical turning point for Oman's national hydrogen strategy, transitioning from paper planning to large-scale implementation.
 

I. National Blueprint: The "Green Transformation Equation" of a Desert Nation

(1) Top-Level Strategy: Three Core Objectives and Implementation Pathways

Oman's Ministry of Energy outlined a clear roadmap in the *National Hydrogen Strategy 2050* released in 2024:

graph TD

A[Resource Monetization] --> A1(Idle Deserts → Energy Bases)

A --> A2(Sunlight Advantage → Low-Cost Green Electricity)

B[Economic Transformation] --> B1(Reduce Oil and Gas Dependency from 68% to 35%)

B --> B2(Create 200,000 Jobs)

C[Geopolitical Hub] --> C1(Asia-Europe-Africa Hydrogen Trade Transit Hub)

C --> C2(Global Hydrogen Supply Share ≥7%)

(2) Hydrom Model: An Innovative "National Operator" Mechanism

Oman's National Hydrogen Company (Hydrom) oversees the entire landscape through a tripartite separation of powers mechanism:

  • Land Control: Divides deserts into 50×50 km² blocks for tender (6 blocks currently released)

  • Pricing Authority: Innovates the HyFix fee model (land rent + green hydrogen production share)

  • Infrastructure Dominance: Unified planning of port/pipeline network infrastructure

2025 Milestones:

  • Two Rounds of Tenders Awarded: 12 international companies secured 8 million tons of green hydrogen capacity (equivalent to Germany's 2030 target)

  • Project Distribution Map:
    https://example.com/oman-h2-projects-map.png [Note: This is a schematic location]

 

II. Industrial Breakthrough: The Strategic Implications of the Shuangliang-ACME Project

(1) Core Project Data Analysis

Indicator

Parameter

Industry Significance

Total Investment

$1.7 billion

Oman's largest single foreign-invested hydrogen energy project

Green Ammonia Capacity

1 million tons/year in Phase 1

Can meet 20% of Germany's green ammonia import demand

Green Hydrogen Source

4GW PV + 1.2GW electrolyzers

Achieves "electricity-hydrogen-ammonia" integration

Localization Rate Requirement

35% (to be achieved by 2027)

Forces local rooting of the industry chain

(2) Oman's Government "Three Birds with One Stone" Strategy

  1. Technology Transfer: Shuangliang will transfer electrolyzer technology to the Duqm Free Zone

  2. Market Binding: ACME secures a 600,000 tons/year off-take agreement with Japan's Marubeni

  3. Infrastructure Drive: Builds Oman's first hydrogen pipeline network (Duqm-Sohar section)

 

III. Development Status: Three Key Challenges Amidst Rapid Progress

1. Water Resource Constraints

  • Current Situation: 9 kg of freshwater required to electrolyze 1 kg of hydrogen
  • Conflict Point: Seawater desalination costs $0.5/m³ for coastal projects, $1.8/m³ for inland projects
  • Breakthrough Case: BP's Dhofar project reduces costs by 30% using atmospheric water harvesting technology

2. Power Grid Challenges

  • Core Conflict: Mismatch between PV power generation peaks and electrolyzer operating curves
  • Actual Data: 18% curtailment rate of PV power generation in May 2025 (higher than the expected 12%)
  • Solution: ACME project includes 200 MWh of flow battery energy storage

3. Talent Gap

  • Local Engineer Proportion: Less than 15% (mainly reliant on technical personnel from China, India, and Germany)
  • Education Layout: Muscat University of Technology establishes a new Hydrogen Energy Engineering College (annual capacity of 200 students)

 

IV. International Competition and Cooperation: Strategies to Counter Saudi Arabia's Impact

(1) Dual-Track Strategy

Dimension

Defensive Strategy (Countering Saudi Arabia)

Offensive Strategy (Expanding Advantages)

Cost Control

Implement tiered electricity price subsidies ($1.2¢/kWh for green hydrogen projects)

Innovate the HyFix flexible revenue-sharing model

Infrastructure Efficiency

Establish a "fast track" for foreign-invested projects (approval reduced to 90 days)

Sovereign fund guarantees infrastructure PPP projects

Certification System

Accelerate EU mutual recognition of the OmanGH2 standard

Develop a blockchain system for green hydrogen traceability

  • (2) Strengthening Differentiated Competitive Advantages

  • Shipping Cost Differential: $18/mt lower freight to Rotterdam than Saudi Arabia

  • Carbon Tax Penetration: World's first country to mandate green hydrogen carbon footprint certification

    • Application Scenario Innovation:

    • Green steel project with Germany's ThyssenKrupp (to commence production in 2026)

 

Oman Air's SAF fuel trial (blending green hydrogen derivatives)

V. Future Outlook: The Critical Window Period from 2025-2030

  1. (1) Three Critical Threshold Predictions
  2. 2026: Green hydrogen cost breaks through $1.3/kg (PV PPA drops to $1¢/kWh)
  3. 2028: Mandatory localization rate increases to 50% (triggers equipment manufacturing transfer wave)

2030: Hydrogen energy accounts for 20% of export value (surpasses LNG as the second pillar)

(2) Potential Risk Alerts

A[Geopolitical Risk] --> B(Yemen conflict affects hydrogen pipelines)

C[Technology Iteration] --> D(Solid oxide electrolyzers disrupt existing technologies)

 

E[Financing Environment Deterioration] --> F(Sovereign credit rating downgraded to BB+)

Conclusion: The Hydrogen Dialectic of a Desert Oasis
As Shuangliang Group's pile driver pounds into Duqm's red earth, Oman's green transformation is undergoing a qualitative shift from blueprint to reality. This nation, once reliant on oil and gas, is now forging a new energy lifeline in its sun-scorched deserts. The essence of the green hydrogen economy is not merely a competition of resource endowments, but a marathon of institutional innovation and perseverance in execution. Facing Saudi Arabia's capital dominance and Europe's technological barriers, Oman has chosen a unique middle path—using the state-led Hydrom mechanism as a shield and open, inclusive international cooperation as a spear.
As Energy Minister Salim al-Aufi stated at the groundbreaking ceremony, "We are not just selling hydrogen; we are selling tickets to an industrial revolution powered by desert sunlight." The ultimate value of these tickets will be revealed over the next five years.

For queries, please contact Lemon Zhao at lemonzhao@smm.cn

For more information on how to access our research reports, please email service.en@smm.cn

SMM Events & Webinars

All