Commencement of Feasibility Study on Hydrogen Hybrid Project Based on Local Production and Consumption in Oman

Sumitomo Corporation (Head Office: Chiyoda-ku, Tokyo; Representative Director, President and Chief Executive Officer: Masayuki Hyodo) and ARA Petroleum LLC (Head Office: Oman; CEO: Sultan al-Ghaithi) (hereinafter, “ARA”), an Omani oil and gas producer, launched a feasibility study on a hydrogen hybrid project based on a local production and consumption model in Oman (hereinafter, “the Project”) in January 2021.

Hydrogen can be produced by effectively utilizing associated gas¹ generated as a by-product during oil production and by using the "steam reforming method.²" Oman, where oil and gas are the main industries, has participated in the hydrogen ministerial conference led by the Japanese government and is actively working to utilize hydrogen. Against the backdrop of Oman's efforts to promote the use of hydrogen, Sumitomo Corporation concluded a memorandum of understanding (MOU) with ARA in March 2020 and has engaged in discussions on the Project.

The Project aims to establish a hydrogen supply chain based on the local production and consumption model at a site, where ARA produces oil and gas, with a target to commence operations in 2023. 300 to 400 tons of hydrogen are expected to be produced annually from associated flare gas generated at the site and mainly utilized as a fuel for fuel cell vehicles that ARA plans to introduce at the site and also the captured CO2 will be effectively utilized in local industries. In addition, 20 megawatt solar power generation panels will be installed and used as a power source for the site and hydrogen production facilities. While contributing to decarbonization and cleanliness of oil and gas production activities through the Project, Sumitomo Corporation is considering expanding the model of the Project both in Oman and overseas in the future.

Sumitomo Corporation expects hydrogen to be one of the important energies in the future, and promotes hydrogen related business such as Local Production and Consumption projects and Large Scale Value Chain projects, that utilises the regional requirements of energy and the characteristics of hydrogen.

In order to greatly contribute to the achievement of our long-term goals toward climate change mitigation, "Carbon neutralisation in 2050" and "Realisation of a sustainable energy cycle", we will accelerate our efforts for the materialisation of a hydrogen society by promoting hydrogen related businesses.

1. Associated gas
A gas containing hydrocarbons produced in an oil field during the production of petroleum

2. Steam reforming method
A method for producing hydrogen from hydrocarbon contained in associated gas. The Project will use a steam methane reforming process to produce hydrogen from the chemical reaction of methane and water.

■ Reference

・Outline of ARA Petroleum LLC

・Conceptual diagram of Project scheme