A consortium led by South Korean steelmaker POSCO Group has secured a $6.7 billion deal to construct the world’s largest green hydrogen plant in Duqm, a port town in central eastern Oman.
This groundbreaking project aims to produce carbon-neutral steel by utilizing hydrogen instead of fossil fuels, making a significant contribution to global efforts in reducing greenhouse gas emissions. The consortium, consisting of four Korean companies, a French firm, and a Thai corporate, brings together diverse expertise and resources to drive the development of this ambitious venture.
The consortium’s composition reflects the collaborative nature of the project. POSCO holds a 28% equity stake, making it the largest shareholder, followed by Samsung Engineering Co. with 12%. Two state-run power companies account for 24%, while French energy services group Engie SA holds 25%. Thai’s PTT Exploration and Production Public Company Ltd. (PTTEP) rounds out the consortium with an 11% stake.
POSCO, a major player in the steel industry, is strategically positioning itself in the hydrogen business. The company is involved in the entire hydrogen value chain, including the development of production facilities, storage tanks, pipelines, terminals, and trading. Their ultimate goal is to produce carbon-neutral steel, replacing the use of coal and natural gas with hydrogen. The pilot facility at the Pohang steel complex in South Korea is set to produce 300,000 tons of carbon-neutral steel annually by 2026.
In the Oman project, POSCO Holdings Inc., the investment holding firm of the steelmaker, will oversee the overall plant-building processes as the project leader. Samsung Engineering, a construction unit of Samsung Group, will handle the engineering, procurement, and construction (EPC) aspects. Other members of the consortium will contribute to the production and sale of green hydrogen generated by the facility.
Oman’s commitment to achieving net-zero emissions by 2050 has fueled its pursuit of green hydrogen production. As the 14th largest exporter of petroleum gas globally, the country recognizes the need to transition to sustainable energy sources. It aims to become the sixth-largest hydrogen exporter worldwide and the largest in the Middle East by 2030, according to the International Energy Agency. These ambitious goals align with the country’s vision of developing a robust and eco-friendly energy industry.
The production of green hydrogen involves splitting water molecules into hydrogen and oxygen, resulting in a carbon-free process. Unlike gray and blue hydrogen, which involve carbon emissions during production, green hydrogen offers a truly eco-friendly alternative. While the commercialization of green hydrogen is still in its early stages due to high production costs, the global market is projected to expand significantly. Deloitte Korea estimates that the green hydrogen market will grow from $642 billion in 2030 to $1.4 trillion in 2050.
To solidify the partnership and explore potential collaborations, Oman’s Undersecretary of the energy and minerals ministry, Moshin bin Hamad bin Saif Al Hadhrami, visited South Korea in May. During the visit, discussions were held with Kang Hyung-sung, Korea’s trade, industry, and energy second vice minister, focusing on securing energy supply chains. The undersecretary also toured Approtium’s Ulsan plant, a hydrogen producer, and POSCO’s Pohang steel manufacturing facilities, seeking to enhance the eco-friendly energy industry in Oman.
The world’s largest green hydrogen plant in Oman signifies a significant step toward a sustainable and low-carbon future. With the collective efforts of the consortium’s diverse expertise and resources, this project holds the potential to reshape the steel industry and contribute to the global decarbonization agenda.
