Abu Dhabi's Adnoc sells first blue ammonia cargo to Japan

UAE energy producer is partnering with Fertiglobe to produce chemical

  
Staff are seen at the Panorama Digital Command Centre at the ADNOC headquarters in Abu Dhabi, UAE May 12, 2018.

Staff are seen at the Panorama Digital Command Centre at the ADNOC headquarters in Abu Dhabi, UAE May 12, 2018.

REUTERS/Satish Kumar

The Abu Dhabi National Oil Company (Adnoc), in partnership with Fertiglobe, has sold its first cargo of blue ammonia to Itochu Corporation in Japan, for use in fertilizer production, the state oil giant said in a statement Tuesday.

Fertiglobe, a 58:42 partnership between OCI NVis a producer and distributor of natural gas-based fertilizers and industrial chemicals based in the Netherlands, and Adnoc, will produce blue ammonia at its Fertil plant in the Ruwais Industrial Complex in Abu Dhabi for delivery to Japan.

The deal follows Adnoc signing an agreement in July with three Japanese companies to explore the commercial production of blue ammonia in the UAE.

Blue ammonia is a low-carbon method of producing the compound and, besides fertilizer, has uses in power industrial heating, heavy road transport and shipping.

Currently, Adnoc is developing a blue ammonia production facility at the Ta’ziz Industrial Chemicals Zone in Ruwais with a potential capacity of 1,000 kilotonnes per year.

The shipments were sold at an attractive premium to grey ammonia, underscoring “the favorable economics for blue ammonia as an emerging source of low-carbon energy,” Adnoc said.

They 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 Fertil, it added.

Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and managing director and group CEO, said the deal expands “the UAE’s position as a regional leader” in the production of hydrogen and its carrier fuels.

“Through the expansion of our capabilities across the blue ammonia value chain, we look forward to furthering our legacy as one of the world’s least carbon intensive hydrocarbon producers and supporting industrial decarbonization with a competitive low-carbon product portfolio,” he added.

Itochu Corporation’s Masaya Tanaka, said: “Starting with this trial of blue ammonia for fertilizer applications, we aim to create a wide range of ammonia value chains for existing industrial applications as well as future energy use.”

Earlier this year, Adnoc formed an alliance with other major state-backed entities Mubadala and ADQ to explore the potential of low-carbon blue and green hydrogen.

(Writing by Brinda Darasha; editing by Seban Scaria)

brinda.darasha@refinitiv.com

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