Masdar exits €600 million Austrian hydrogen project; OMV pushes ahead alone

Summary

• Abu Dhabi's Masdar withdrew unexpectedly from OMV's Austrian green hydrogen venture, the Austrian group said Friday.
• The partnership was announced in November last year, with Masdar expected to invest several hundred million euros.
• OMV says financing is largely secured, leaving Europe's planned fifth-largest electrolysis plant on track for 2027.

The latest

Abu Dhabi's state-owned renewable energy firm Masdar has pulled out of a €600 million green hydrogen project in Austria, OMV said Friday, ending a partnership announced only last November. The Austrian oil and gas group told Reuters it will build the plant alone and that the exit would not affect the project, which remains largely financed.

Details

• The project: The planned facility is a 140-megawatt electrolysis plant scheduled to be operational by the end of 2027, producing up to 23,000 tonnes of green hydrogen a year. OMV says it would be the largest such plant in Austria and among the five largest in Europe.
• The price tag: The venture is estimated to cost around €600 million, equivalent to about $689 million at current rates. OMV told Reuters the project remains largely financed despite the loss of its Abu Dhabi partner, and said the withdrawal would not affect construction plans.
• The financing: The European Investment Bank has already committed a €450 million loan toward the plant, covering the bulk of the estimated cost. Austria has indicated it will provide public funding on top of that, though OMV did not specify the size or timing of the state contribution.
• The reason given: OMV said Masdar's decision to withdraw was driven by strategic changes in Abu Dhabi, according to Salzburger Nachrichten, which first reported the news. OMV did not provide further details on what those changes involve or when Masdar communicated its decision.
• Masdar's silence: The Abu Dhabi company was not immediately available for comment, Reuters reported. No public statement from Masdar has accompanied the exit, leaving OMV's account the only version of events on the record so far.
• What was lost: Masdar had been expected to contribute an investment worth several hundred million euros under the partnership unveiled in November last year. The reversal removes a foreign equity partner from what OMV has positioned as its flagship hydrogen asset in Europe.
• The wider relationship: OMV retains close ties to Abu Dhabi beyond this venture. State oil company ADNOC holds a 24.9% stake in the Austrian energy group, making it one of OMV's most significant shareholders.
• The chemicals tie-up: The two sides recently combined their chemicals businesses under Borouge International, creating what Reuters described as the world's fourth-largest plastics producer. That transaction proceeded on a separate track from the hydrogen partnership now being unwound.

Background

The hydrogen venture was announced in November last year as a joint effort between OMV and Masdar, Abu Dhabi's state renewable energy company. Green hydrogen produced by electrolysis is central to European decarbonisation plans, which is why the European Investment Bank and the Austrian state committed public money to the plant.

Between the lines

The exit sits awkwardly beside the rest of the OMV–Abu Dhabi relationship, which is deepening rather than cooling: ADNOC still holds 24.9% of OMV, and the two sides only recently merged their chemicals arms into Borouge International. That combination suggests the withdrawal is read better as a reallocation inside Abu Dhabi's own portfolio than as a retreat from Austria, consistent with the strategic-changes explanation OMV gave.

What's next

Watch for a statement from Masdar setting out its reasoning, confirmation of the size and timing of Austria's public funding, and whether OMV names a replacement investor before the end-2027 operational target.

Source: Reuters, Salzburger Nachrichten