(Jan 21): Emirati firm Fertiglobe plc intends to invest more than US$1 billion (RM4.47 billion) to produce cleaner ammonia if it gets commitments to buy from Asia.

Japan and South Korea both have plans to subsidise some imports of the commodity, touted as a climate-friendly fertiliser and fuel for power plants and transportation. Securing contracts under such programmes this year would allow Fertiglobe to take a final investment decision on a blue ammonia project in the United Arab Emirates, its CEO said.

Almost all ammonia is currently made from hydrocarbons, but the blue version is produced at plants fitted with carbon-capture equipment, cutting its environmental footprint. The cost of production rises steeply according to the cleanliness of the method used, so potential suppliers want to make sure there are buyers before making investments.

Fertiglobe’s proposal would see it upgrade an existing project at Ta’ziz in Ruwais, CEO Ahmed El-Hoshy said in an interview. That facility, being built with Mitsui & Co and GS Energy Corp, is due to start ammonia production in 2027 using hydrogen from Borouge plc’s nearby operation and will release 50% less CO2 than a typical ammonia plant, El-Hoshy said.

The main difference between that and a “dark blue” ammonia facility is that the latter uses carbon-capture technology to trap almost all the CO2 emitted and bury it in permanent storage.

To produce the cleanest form of blue ammonia, Fertiglobe would need to install an “autothermal reformer” to convert natural gas into hydrogen and a pure stream of CO2 that can be captured and stored, El-Hoshy said. The upgrade may also provide hydrogen for an expansion project to make more blue ammonia.

Abu Dhabi National Oil Co, which owns most of Fertiglobe’s shares, has tested the process of liquefying and burying carbon dioxide in old hydrocarbon fields southwest of Taz’iz, El-Hoshy said.

Even if international buyers don’t commit to taking Fertiglobe’s full output of blue ammonia, the company may still go ahead and sell a portion of the production to shippers as a bunker fuel, according to the CEO.

Beyond the UAE, Fertiglobe expects to take a final investment decision in the first half of this year on an Egyptian plant to make green ammonia, where the production process is completely carbon-free. The project would include construction of 273MW of renewable power generation capacity.

Fertiglobe would sell the ammonia for €1,000 (RM4,646.65) a tonne, much more than the price commanded by grey ammonia, which is produced from natural gas. The company secured a commitment from Hintco GmbH to buy its output last year, helped with subsidies from the German government.

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