Construction begins on Oman’s first green hydrogen-ready steel plant

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DUQM: Construction of Vulcan Green Steel’s (VGS) plant – the Sultanate of Oman’s first green-hydrogen-ready steel project - commenced yesterday, November 27, under the auspices of Dr Ali bin Masoud al Sunaidy, Chairman of the Public Authority for Special Economic Zones and Free Zones (OPAZ).

The plant, located in the Duqm Special Economic Zone, aims to be powered entirely using green and renewable energy, and will produce 5 million metric tonnes per annum (5 MTPA) of green steel.

Speaking to the press, Dr Ali al Sunaidi, OPAZ Chairman, highlighted the significance of this project. “This project aims to produce 5 million tonnes of green steel with an investment of up to $3 billions. The significance of this project is paramount as it will produce steel for the automotive sector, electrical tools sector, and also the wind turbine sector.” According to the Chairman, the Authority is currently in discussions with buyers in European and Asian markets.

Speaking to the Observer, Vulcan Group Senior Adviser Khalid al Jashmi explained that the project will use natural gas in the first phase pending the availability and supply of green hydrogen to the site. However, he shared that the project’s steel output will still remain low in carbon due to the use of advanced technology which will reduce emissions by 40 per cent in comparison with that of regular steel plants.

Following the first year of the project, the plant will slowly reduce its reliance on natural gas by a rate of 50% until the project becomes green entirely, al Jashmi said.

Vice Chairman of Vulcan Green Steel, Venkatesh Jindal, highlighted the significance of the plant in his keynote address. “Vulcan Green Steel stands hand in hand with Oman as we collectively strive for a cleaner and greener industrial economy. Our green pledge, made just weeks ago, is not a mere proclamation. It is a substantial and real investment of more than $3 billion in a state-of-the-art green hydrogen ready steel plant in Duqm, the first of its kind and the largest globally.” Yesterday’s groundbreaking ceremony, which was combined with a symbolic planting of an ‘Eternal Green Tree’, attracted a number of dignitaries representing Omani government and public sector organisations, and executives from Jindal Group as well, notably Naveen Jindal, Chairman – Jindal Group.

Scheduled for completion by 2026 and with production starting in 2027, the green steel project of VGS in Duqm will establish a fully integrated green hydrogen-ready steel plant with approximately 85% fewer CO2 emissions than the current global average, before the end of the decade. This project is estimated to achieve a significant 12 million tonnes per annum in CO2 savings.

Another key innovation involves the extensive utilization of renewable energy sources in steel production. While wind and solar power will provide around 16 hours of electricity, VGS is actively exploring additional storage options to source 24x7 green energy to bridge the remaining 7 – 8 hours.

This will be done in partnership with Vulcan Green Energy (VGE) and OQAE that have signed an agreement to explore joint development of Integrated Energy Valley (IEV), first of its kind project in GCC, that combines solar, wind and energy storage to provide round the clock, cost competitive green energy to meet the growing decarbonisation needs of large industries in Oman such as VGS.

The Direct Reduction Iron Plant for which the foundation is laid in this ceremony, is going to be a green steel plant with the flexibility of transition from 100% natural gas to 100% green H2, with a unique combination of hot DRI and hot briquetting system. It is going to be the largest single module plant (2.5 MTPA) in the world.