PARIS - French energy company Engie was awarded a land parcel in Oman on Wednesday, in the first step towards its plan to build an integrated renewable ammonia plant there and export 1.2 million tons of the green fuel to South Korea by the mid 2030s.

Engie was awarded the land parcel by Hydrom, the sultanate's hydrogen development entity, following a tender process.

The approximately $7 billion project is managed by a consortium including steelmaker Posco, several South Korean power companies, Samsung Engineering and a subsidiary of Thailand's national oil company PTTEP.

It will comprise of five gigawatts (GW) of new wind and solar, batteries, an electrolyzer producing 200,000 tons of hydrogen each year, and dedicated hydrogen pipelines to bring the gas to an ammonia production plant near the port of Duqm.

Green ammonia is made from renewable hydrogen.

From there, the ammonia will be shipped to Asian buyers for 40 years, mainly to decarbonize South Korean steel production by being burned as fuel, said Frédéric Claux, who manages Engie's flexible power generation for Asia, Africa and the Middle East.

"Engie has about 100 hydrogen projects globally but this would be the biggest we participate in so far, and what's notable is that we already have the offtakers lined up, namely our Korean consortium partners," Claux said.

The executive cited Oman as ideal for its export-friendly location on the Indian Ocean, the political will to facilitate green energy projects and its abundance of wind resources in addition to solar.

Oil majors Shell and BP have also announced hydrogen projects in Oman. Feasibility studies on wind and solar potential at the site will take place first, with a final investment decision expected by 2027. The site is planned to be operational by 2030, with a first cargo of green ammonia slated for the mid-2030s. ($1 = 0.9130 euros)

(Writing by America Hernandez Editing by Sharon Singleton and David Goodman )