Emirati company Fertiglobe Plc plans to invest over $1 billion in cleaner ammonia production, contingent upon securing purchase commitments from Asia.

Source: Financial Post

Japan and South Korea are both developing plans to subsidize certain imports of ammonia, which is being promoted as an environmentally friendly fertilizer and fuel source for power plants and transportation. According to the company’s CEO, obtaining contracts under these subsidy programs this year would enable Fertiglobe to make a final investment decision regarding a blue-ammonia project in the United Arab Emirates.

Currently, nearly all ammonia is produced from hydrocarbons; however, blue ammonia is generated at facilities equipped with carbon capture technology, significantly reducing its environmental impact. The production costs increase considerably based on the cleanliness of the method used, prompting potential suppliers to seek assurance of buyers before committing to investments.

Fertiglobe’s initiative involves upgrading an existing project at Ta’ziz in Ruwais, as stated by CEO Ahmed El-Hoshy in an interview. This facility, being developed in partnership with Mitsui & Co. and GS Energy Corp., is scheduled to commence ammonia production in 2027 using hydrogen sourced from Borouge Plc’s nearby operations. It is projected to emit 50% less CO2 than a conventional ammonia plant, El-Hoshy noted.

The key distinction between this facility and a “dark blue” ammonia plant is that the latter employs carbon capture technology to trap nearly all CO2 emissions, which are then permanently stored.

To generate the cleanest form of blue ammonia, Fertiglobe would need to implement an “autothermal reformer” to convert natural gas into hydrogen and a pure stream of CO2 suitable for capture and storage, El-Hoshy explained. This upgrade might also supply hydrogen for an expansion project aimed at increasing blue ammonia production.

Carbon Storage Initiatives

Abu Dhabi National Oil Co., the majority shareholder of Fertiglobe, has conducted tests on the liquefaction and burial of carbon dioxide in former hydrocarbon fields southwest of Ta’ziz, according to El-Hoshy.

Even if international buyers do not commit to purchasing the entirety of Fertiglobe’s blue ammonia output, the company may still proceed to sell a portion as bunker fuel to shippers, according to the CEO.

Outside the UAE, Fertiglobe anticipates making a final investment decision in the first half of this year regarding an Egyptian plant that will produce green ammonia, which is entirely carbon-free. This project will involve the construction of 273 megawatts of renewable energy generation capacity.

Fertiglobe plans to sell the ammonia at €1,000 ($1,037) per ton, significantly higher than the price of gray ammonia produced from natural gas. Last year, the company secured a commitment from Hintco GmbH to purchase its output, aided by subsidies from the German government.