Oman has awarded two green hydrogen projects in Duqm with a combined targeted production capacity of approximately 121,000 tonnes of hydrogen annually by 2032, while launching a new tender linking renewable energy development with the growing electricity demand of AI data centers.
The agreements, awarded through the third auction round managed by Hydrogen Oman (Hydrom), introduce green ammonium nitrate production alongside additional green ammonia capacity. The developments reflect Oman’s efforts to expand downstream hydrogen industries and establish domestic demand alongside export markets.
The first agreement involves Oman’s Petrogas E&P and Italy’s Bio3Energy Srl. The project targets annual production of approximately 625,000 tonnes of green ammonium nitrate, using around 50,000 tonnes of green hydrogen and 1.16 GW of renewable energy capacity. The development will occupy approximately 100 square kilometers in Duqm, with an option for additional land for future expansion.
The second agreement brings together PLN Indonesia Power Renewables, Oman’s Alawi Enterprises and Singapore’s HBA Offshore International. The consortium plans to produce approximately 400,000 tonnes of green ammonia annually for export by 2032, supported by 1.45 GW of solar generation and 1 GW of electrolysis capacity. The project will also cover approximately 100 square kilometers.
The two developments expand Oman’s hydrogen portfolio beyond conventional ammonia exports. Green ammonium nitrate introduces an additional downstream product with applications in fertilizer manufacturing and mining, potentially creating more opportunities for domestic industrial processing.
The latest awards follow changes to Hydrom’s investment framework, which incorporates feedback from developers and lessons from previous auction rounds. The revised conditions are intended to improve project economics and make participation more attractive amid uncertain global hydrogen demand and financing conditions.
Measures include a 90% reduction in land lease fees during development, potential additional relief during the front-end engineering design phase, reduced base royalties during initial production years and corporate tax exemptions of up to 10 years.
These incentives address some of the costs facing early-stage hydrogen developers. However, the projects will still need to secure financing, complete engineering work and establish commercially viable supply agreements before reaching final investment decisions.
Oman links green hydrogen strategy with AI data centers
Alongside the two Duqm awards, Hydrom has launched its fourth auction round, introducing a new investment opportunity in Dhofar focused on renewable energy and green hydrogen projects serving data centers. The Green-Powered Data Centre Hydrogen Auction is designed around data centers as anchor electricity offtakers. Registration for interested investors is open until February 2027.
The initiative connects Oman’s hydrogen strategy with the expanding digital infrastructure market. AI and cloud computing facilities require substantial electricity supplies, making long-term power availability, reliability and operating costs important considerations for investors.
Under the proposed model, renewable generation would supply electricity to data centers, while green hydrogen could provide an additional option for firming supply and supporting operational stability. Its commercial role will depend on the cost of hydrogen-based power generation and the technical configuration of the projects.
The initiative is also linked to Oman’s Digital Triangle strategy, which seeks to strengthen the country’s position as a destination for AI and cloud computing investments through international connectivity and digital infrastructure.
For Oman, the approach could create a domestic market for renewable electricity and hydrogen rather than relying exclusively on exports. However, the economics of supplying energy-intensive data centers with renewable power and hydrogen will need to compete with conventional grid electricity and other firm generation options.
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