Oracle Energy, a joint venture between Oracle Power and Sheikh Ahmed Dalmook Al Maktoum, and PetroChina International (Middle East) Company Limited (PCME) have signed a Memorandum of Understanding (MoU) on cooperation and joint development of commercial avenues for Oracle Energy’s planned 400 MW green hydrogen project in Sindh, Pakistan.
More specifically, Oracle Energy and PCME signed the MoU to jointly cooperate, on a non-binding basis, in the commercialisation of the project, with Oracle Energy expected to supply and deliver green hydrogen to PCME from the facility. On the other side, PCME is expected to arrange offtake for the green hydrogen and arrange for the trade of associated carbon credits, after establishing viability through analysis of feasibility reports of the project and subject to price, quality and its board’s approval.
According to Oracle Power, PCME shall have the right of first refusal (ROFR) to enter into a contract to purchase all or part of the green hydrogen and carbon credits from the project, and Oracle Energy shall, prior to financial close, ask PCME to meet the best offer. In the event that PCME declines to meet the best offer, the ROFR for PCME shall lapse. Furthermore, PCME will have the ROFR to match the best offer received by Oracle Energy in relation to any available spot cargoes and/or any available carbon credits which have not been agreed to be sold/traded through any long-term agreement signed before financial close.
The MoU is effective from 2 June 2023 and is valid for five years from the date when the green hydrogen is first produced from the project, Oracle Power said, adding that there is an option to mutually extend it.
Naheed Memon, CEO of Oracle Power, commented: “The signing of this MoU with PCME is another huge step forward as we line up another significant potential offtaker. PetroChina is a large oil and gas trader and can potentially provide our project a commercially viable route to market.”
To note, State Grid Corporation of China recently signed an agreement with Oracle Energy through CET, its subsidiary, to be a potential investor in the project, and has commenced work on studies.