Oracle Energy looks to the Gulf after Pakistan hydrogen project

Oracle Power

• Dubai’s Kaheel Energy owns 70% of Oracle Energy   
• Pakistan project to produce 55,000 tonnes of green hydrogen per year 
• GCC looking to green hydrogen as part of zero-carbon drive

Oracle Energy – a joint venture between UK-listed Oracle Power and an investment vehicle of Dubai royal Sheikh Ahmed Dalmook Al Maktoum – is “open” to developing clean energy projects in the Gulf.

With its debut green hydrogen plant planned in Pakistan, Oracle Energy co-founder Naheed Memon told AGBI: “Expanding in the Middle East is a doable proposition.

“These countries are good jurisdictions to work in because the environment is set up for such projects,” said Memon, who is also chief executive of Oracle Power.

“The cost of producing green hydrogen is cheaper than in other parts of the world. There is connectivity, and the region is ready and able to back the transition to clean energy.”

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Memon, who would like to bring in investors from Saudi Arabia or Oman for future projects, added: “There’s a lot of interest in green hydrogen, but we don’t want to do two things at once. It’s better to play off the back of success.”

Oracle Energy is planning to build a 400 megawatt green hydrogen plant on 7,000 acres in a designated wind corridor in the Sindh province of south-east Pakistan.

It would deploy a combination of 500mw of wind power capacity and 700mw of solar to produce 55,000 tonnes of green hydrogen each year. 

Oracle Energy is 30 percent-owned by Oracle Power and 70 percent by Sheikh Ahmed’s Kaheel Energy. The joint venture raised £500,000 ($602,192) through a share placing last month.

In October it appointed engineering giant Thyssenkrupp Uhde to lead a feasibility study to be published in the first half of this year. 

It announced on Tuesday the signing of a memorandum of agreement with China Electric Power and Technology Co, a subsidiary of State Grid Corporation of China, to potentially develop, finance, construct, operate and maintain the plant in Pakistan. 

The project is expected to cost between $1.5 and $2 billion, according to Memon. With parent Oracle Power listed on the AIM (Alternative Investment Market) of the London Stock Exchange, with a market capitalisation of £6 million, it needs partners such as China Electric Power and Technology Co to deliver projects. 

Oracle Power’s directly owned portfolio includes a thermal coal project east of Karachi and two licences to dig for gold in Western Australia.

The portfolio is currently under review, said Memon, and the company is in talks with various parties to develop joint ventures and possibly repurpose the Pakistani coalfield land for renewables. 

Pakistan is heavily reliant on coal and wants to cut its carbon emissions by 50 percent of 2016 levels by 2030. It views green hydrogen as one solution, and Oracle Energy would be a first mover if the plant gets up and running.  

Green hydrogen is hydrogen produced by splitting water into hydrogen and oxygen using renewable electricity.

The global hydrogen production market was valued at $130 billion last year, according to the World Bank, and is estimated to grow by up to 9.2 percent per year until 2030. 

The GCC is set to play a major role in the market’s growth as Gulf nations decarbonise oil-rich economies, said a report by Frost & Sullivan in January.  

“GCC countries, especially the UAE, Saudi Arabia and Oman, are working on national strategies aimed at developing the hydrogen market in the region and positioning themselves as future hydrogen exporters,” the report said. 

Abu Dhabi’s Masdar has an agreement with the Port of Amsterdam, Zenith Energy, and others to explore the development of a green hydrogen supply chain to Dutch and European markets.

In addition Adnoc is investing a 25 percent stake in BP’s H2Teesside hydrogen plant in the UK.

The UAE’s state-owned Emirates Global Aluminium (EGA) is looking to the Pakistan project to help it decarbonise its processes.

Under an memorandum of understanding signed last March, EGA would take almost all (50,000 tonnes) of Oracle Energy’s targeted annual output of 55,000 tonnes from the plant. A deal is expected to be announced during Cop28. 

This would be an excellent outcome for both Oracle Energy and EGA, “which wants to convert its aluminium smelter to use energy-efficient hydrogen and green ammonia rather than natural gas”, Memon said.

“They would rather engage with just one supplier rather than three people selling different amounts. Then they can better monitor, check, evaluate, and negotiate prices.”

One of the main issues in commercialising hydrogen globally will be the supply of technology and equipment, Memon added.

“It’s easy to say ‘switch’ but the fact is there are few companies that can afford it or manage it logistically. These kinds of generators do not sell in the grocery store,” she said.   

“That’s why the Middle East is a good place because governments are really willing to put money behind it.”