Oman Opens a Hydrogen Auction Built Around Data Centres and Awards Two Duqm Projects

Hydrom, the state body that runs the sultanate's green hydrogen programme, announced the fourth auction round at COP31 on November 12. It also awarded two integrated projects in Duqm under its third round, with a combined planned output of about 121,000 tonnes of green hydrogen a year by 2032, the agency said in a press release.

The fourth round reverses the usual model. Gulf hydrogen schemes have mostly been built for export or for ammonia production. In this round, Hydrom is offering investors a package that spans energy and digital infrastructure in the southern governorate of Dhofar. Data centres serve as offtakers, and renewable generation and hydrogen production are sized around their need for steady, reliable electricity. The agency called it a demand-led way of allocating projects and said it was meant to build domestic uses for hydrogen. Expressions of interest can be registered on Hydrom's auction platform until February 2027.

For AI infrastructure developers, the round offers land and a renewable power supply in a market close to Gulf demand. Elsewhere in the region, the supply of power is turning into the main constraint on data centre construction. Hydrom did not say how much data centre capacity it hopes to attract, which electricity or hydrogen prices bidders should expect, or how hydrogen would be used to power the sites.

The Two Duqm Awards

The first third-round award went to Oman's Petrogas E&P and Italy's Bio3Energy Srl to produce green ammonium nitrate, a product Oman has not made before that is used in fertilisers and mining explosives. The project targets 625,000 tonnes a year by 2032. It will use about 50,000 tonnes of green hydrogen annually and 1.16GW of renewable power. It has a 100 sq km site, with a proposed reservation of another 100 sq km for future expansion.

The second award went to a consortium of PLN Indonesia Power Renewables, Oman's Alawi Enterprises and Singapore's HBA Offshore International. It plans an integrated hydrogen and ammonia plant producing 400,000 tonnes of green ammonia a year for export by 2032. The plant would draw on about 1.45GW of solar generation and 1GW of electrolysis capacity on another 100 sq km plot.

Hydrom changed its terms for the third round after consulting the market and developers. Bidders could define their own footprint inside land blocks of up to 300 sq km, with a minimum project area of 100 sq km, and they had nine months to prepare bids. The incentives included a 90% cut in land lease fees during development, possible further relief during front-end engineering design, lower base royalties in the first years of production, and corporate tax exemptions of up to ten years.

The release did not give investment values for the two projects or say when final investment decisions are expected. It also included no comment from Hydrom executives or the winning developers. Guidelines for the fourth round are published on Hydrom's website, and registration closes in February 2027.