ABU DHABI: Abu Dhabi National Oil Company (ADNOC) said it has partnered with Fertiglobe to sell its first cargo of blue ammonia to Itochu in Japan, for use in fertilizer production.
The shipments represent the first production milestone of a planned scale-up of blue ammonia production capabilities in Abu Dhabi, which is expected to include a low-cost debottlenecking program at Fertiglobe’s Fertil site, UAE state news service WAM reported, citing a statement from ADNOC.
They were sold at an attractive premium to grey ammonia, underscoring the favorable economics for blue ammonia as an emerging source of low-carbon energy, it said.
Ammonia is a carrier fuel for hydrogen. A report earlier this year by Dii Desert Energy and Roland Berger said the Gulf region could create a $200 billion green hydrogen industry by 2050. The Gulf benefits from its strategic geographic location between European and Asian markets.
Green hydrogen is created with renewable energy and water, while blue hydrogen uses the traditional Haber-Bosch method but captures the carbon emissions.
CO2 from the ammonia production process will be captured and transferred to Al Reyadah, the first commercial-scale carbon capture plant in the Middle East and the world’s first commercial facility to capture CO2 from the iron and steel industry. The CO2 is subsequently used in ADNOC Onshore’s Rumaitha and Bab fields where it is stored underground. Each year, Al Reyadah captures up to 800,000 tons of CO2 from local UAE steel production.
Fertiglobe, the world’s largest seaborne exporter of nitrogen fertilizers, is a 58:42 joint venture between Dutch-listed chemical producer OCI and ADNOC. In June, Fertiglobe, ADNOC and ADQ said they would partner in a one million metric ton per annum blue ammonia project at TA’ZIZ in Ruwais, subject to regulatory approvals.
In April, it was reported that ADNOC and OCI had hired banks, including Morgan Stanley and Citigroup, for a possible $7 billion IPO of Fertiglobe.
“Today’s announcement builds upon ADNOC’s commitment to expanding the UAE’s position as a regional leader in the production of hydrogen and its carrier fuels, meeting the needs of critical global export markets such as Japan,” said Sultan Ahmed Al Jaber, minister of industry and advanced technology and ADNOC group CEO.
Ammonia can be used as a low-carbon fuel across a wide range of industrial applications, including transportation, power generation, refining and industries, including steel, wastewater treatment, cement and fertilizer production. For Japan, in particular, hydrogen and its carrier fuels, such as blue ammonia, are expected to play an important role in the country’s ongoing industrial decarbonization efforts.