Japan’s Mitsui & Co announced on Monday its intention to establish a low carbon dioxide (CO2) iron metallics production facility in Oman.

The conglomerate said in a press statement that with Kobe Steel, it has signed a memorandum of understanding (MoU) with Public Authority for Special Economic Zones and Free Zones (OPAZ) and a Land Reservation Agreement with Port of Duqm Company (PODC) for the project.

OPAZ oversees the Special Economic Zone at Duqm and PODC operates the Port of Duqm.

Both companies have also been in discussion with the Oman's Ministry of Energy and Minerals on detailed condition for natural gas supply as part of their joint study on the possibility of establishing a five million tonnes capacity low CO2 iron metallics production plant in the Special Economic Zone at Duqm (SEZAD).

The statement said Mitsui and Kobe Steel will conduct the detailed business study, with an aim to commence production by 2027. The products will be supplied to businesses in Asia including Kobe Steel and other global markets such as Europe.

The proposed plant will use Kobe Steel’s proprietary direct reduced iron (DRI) technology MIDREX, which uses hydrogen-rich reformed gas made from natural gas to reduce iron ore, making its CO2 emission level lower than the conventional blast furnace route.

In the long run, the project will aim for further decarbonisation through measures such as replacement of natural gas with hydrogen and carbon capture, utilisation and storage (CCUS), with a goal to expand production capacity as well, the statement said.

It also noted that Oman has the natural gas reserves necessary for producing DRI and outstanding locations for renewable energy, making it a highly suitable area for competitive green hydrogen.

(Writing by Anoop Menon; Editing by Bhaskar Raj)