[Exclusive] $7 Billion Oman Hydrogen Project Launch... POSCO and Samsung E&A Joint Venture Established

Establishment of 'Hydrogen Dukum'
Creation of 5GW Renewable Energy Complex
Annual Production of 220,000 Tons of Green Hydrogen

The 'Duqm Project' in Oman, Middle East, which produces hydrogen using renewable energy, is set to be fully operational. The total investment is reported to be $7 billion, approaching 10 trillion KRW. Posco Holdings, which is developing hydrogen reduction steelmaking, and Samsung E&A, which is fostering future energy new businesses, have joined the project, promising to ease the supply of eco-friendly hydrogen in Korea.

According to the industry on the 1st, Posco Holdings and Samsung E&A recently established a limited liability company (LLC) called 'Hydrogen Duqm' to promote the Duqm project. They secured 44.8% and 19.2% of the shares, respectively.

The remaining shares are reportedly divided among French energy company ENGIE and Thai oil and gas exploration company PTTEP, which also joined the project. Additionally, Korea East-West Power and Korea South-East Power, subsidiaries of Korea Electric Power Corporation, are participating in this project.

The consortium involving POSCO Holdings signed an exclusive green hydrogen project development and production, as well as site lease agreement with Hydrom in the Duqm region on June 21 last year (local time) in Muscat, Oman. From the left: Ki-Yeol Lee, Executive Director of Samsung Engineering; Stephan Gobe, Executive Director of Engie; Fr?d?ric Claux, Head of Engie Asia Middle East; Salim bin Nasser Al Aufi, Minister of Energy and Minerals of Oman and Chairman of Hydrom Board; Ju-Ik Cho, Head of Hydrogen Business Team at POSCO Holdings; Young-Jae Lee, Head of Hydrogen Convergence Division at Korea South-East Power; Ki-Yeol Hong, Head of Overseas Business Office at Korea East-West Power; Noppajit Chaiwanakup, Executive Director of PTTEP. (Photo by POSCO Holdings)

These six companies formed a consortium and won the exclusive development and production rights for the 'green hydrogen (hydrogen produced from renewable energy)' business in the Duqm area from Hydrom, a public enterprise in Oman responsible for hydrogen business, in June last year. This business right will be maintained for the next 47 years.

The Duqm project involves establishing a 5GW-scale solar and wind power complex on a 340 km² site in the Duqm Special Economic Zone, about 450 km southwest of Muscat, the capital of Oman, producing zero-carbon electricity to generate 220,000 tons of green hydrogen annually.

The produced hydrogen will be converted into 1.2 million tons of ammonia annually for safe and efficient transportation and entirely imported to Korea. Posco plans to use this hydrogen as a raw material for hydrogen reduction steelmaking, and power companies plan to use it for hydrogen co-firing power generation.

ENGIE stated to the French local media that approximately $7 billion (about 9.345 trillion KRW) will be invested in the entire project, including power generation and electrolyzer systems and green ammonia production facilities for downstream hydrogen production.

These companies plan to start construction of renewable energy facilities, green hydrogen plants, and ammonia synthesis plants in 2027, aiming for completion in 2030. The newly established joint venture, Hydrogen Duqm, is expected to be responsible for everything from project preparation to execution.

Concept model of the Oman Green Hydrogen Project unveiled at last year's hydrogen industry exhibition 'H2 MEET' (Provided by POSCO Holdings)

Posco Group plans to operate green hydrogen projects in six regions worldwide, including the Middle East, Korea, North America, Australia, Malaysia, and India, to establish a 7 million-ton clean hydrogen production system by 2050. Posco Holdings has also established a cooperative system with CF Industries, the world's largest ammonia producer, for blue ammonia production in the United States.

The reason Posco Group is securing clean hydrogen is that the steel sector has the highest carbon emissions among manufacturing industries. Hydrogen is the core of hydrogen reduction steelmaking, which is being developed to reduce carbon emissions. Hydrogen reduction steelmaking uses hydrogen instead of carbon monoxide to reduce iron ore to iron.

Kim Hee, Executive Director of Posco Holdings, emphasized at the recently held Carbon Neutral Policy Council, "When hydrogen reduction steelmaking technology is developed and commercialized, the reducing agent that separates oxygen from iron ore must be changed from coal to hydrogen," adding, "Since 3.7 million tons of green hydrogen and an additional 4.5GW of zero-carbon power are required annually, the government must ensure the stable supply of green hydrogen and zero-carbon energy."