Oman's OQ (formed by the merger of erstwhile Oman Oil and Orpic Group) expects its recently launched Alternative Energy business line to contribute $300-$450 million in terms of Earnings before Interest, Taxes and Depreciation (EBITDA) by 2030, according to the company's first sustainability report.

The $28 billion integrated energy giant had closed 2019 with a consolidated EBITDA of $2.3 billion and a net profit of $597 million.

Launched in June, OQ's alternative energy business is being built around three pillars - green molecules, energy assets and energy optimisation and efficiency.

Describing green molecules as the core and biggest opportunity for Alternative Energy business, the report said the company, over a seven plus year period, would identify areas where it can profitably sell green hydrogen, green ammonia, green water and green organic chemicals, and define an industrial path to deliver them.

OQ would invest in alternative energy assets and become a provider of green utilities and services - wind, solar power, waste to energy and water treatment - to industrial and commercial customers over 3-5 years, the report said. It noted that these assets would provide the company with a stable cash flow while also serving as a "vital enabler" for the green molecules pillar.

The third pillar of energy efficiency and optimisation, the report continued, would be implemented over a period of 1-5 years "to generate EBITDA at low capex" through commercial optimisation and improvement of energy efficiency within assets.

The company is also aiming to raise the share of renewable energy, manly solar and wind, in its total power consumption to 40 percent by 2030 in line with Oman Vision 2040. OQ's total energy consumption for 2019 stood at 88,342 Gigajoule for all its operated business assets.

Last month, Zawya Projects had reported that OQ plans to launch renewable energy projects by the end of 2020 or early 2021.

The sustainability report also said that the Alternative Energy business is expected to create a positive perception when OQ goes for an Initial Public Offering, and also support the company's funding plans by opening Green Finance as a new debt source.

(Writing by Sowmya Sundar; Editing by Anoop Menon)

(anoop.menon@refinitiv.com)

Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.

© ZAWYA 2020