ADNOC partners with UAE's Fertiglobe to develop first blue ammonia facility

Abu Dhabi National Oil Co. will partner with Abu Dhabi-based chemical company Fertiglobe to develop its first blue ammonia facility with a capacity of 1 million mt/yr, as the energy producer seeks to attract investments in low-carbon products, ADNOC said in a statement on June 22. The facility will be located in TA'ZIZ Industrial Chemicals Zone in the industrial hub of Ruwais and is slated for a startup in 2025, said ADNOC.

Fertiglobe -- a 58:42 partnership between Dutch chemicals company OCI and ADNOC -- and the UAE energy producer will jointly conduct pre-front end engineering design and FEED activities, ADNOC said in the statement.

The statement did not disclose Fertiglobe's stake in the ammonia facility but said that a final decision on investment is expected in 2022.

"We believe hydrogen and its carrier fuels, such as ammonia, offer strong potential as low-carbon energy sources," Sultan al-Jaber, ADNOC CEO, said in the statement. "As we continue to grow our manufacturing base in Ruwais, the UAE is well-placed to meet increasing global demand for this new fuel while strengthening our position as a world-scale chemicals and industrial hub and top destination for local and international investment."

Fertiglobe is the first international investor to partner with TA'ZIZ, a joint venture between ADNOC and Abu Dhabi sovereign wealth fund ADQ.

OCI's production comprises approximately 16.2 million mt/yr of nitrogen fertilizers, methanol, biofuels, diesel exhaust fluid, melamine, and other nitrogen products.

OCI's investment with ADNOC "helps grow our low carbon and clean fuels product offerings, which includes our fast-growing biofuels business, and further builds on our recently announced 365,000 tons per annum blue ammonia capability in Texas," Nassef Sawiris, executive chairman of OCI N.V. and CEO of Fertiglobe, said in the statement.

KIZAD announces green ammonia facility

The UAE's Khalifa Industrial Zone Abu Dhabi or KIZAD has also announced plans to build a $1 billion green ammonia facility in the free zone, targeting regional and international markets as OPEC's third-largest oil producer boosts investments in clean energy.

Helios Industry, a privately-owned special project vehicle company or SPV, will invest to develop the facility over several years in two phases to eventually produce 200,000 mt of green ammonia, KIZAD said in a May 25 statement. The green ammonia, which will be produced from 40,000 mt of hydrogen, will be powered by an 800 MW solar power plant. KIZAD, which is a unit of state-owned Abu Dhabi Ports, did not clarify the timeline over which the 200,000 mt of output will be produced.

Currently ADNOC produces 300,000 mt/yr of hydrogen and has plans to boost its capacity to over 500,000 mt/yr. ADNOC's Al Reyadah project can capture 800,000 mt/year of CO2 from local UAE steel production units and the company plans to boost its carbon capture utilization and storage capacity to 5 million mt/year by 2030.

ADNOC has announced a number of hydrogen agreements since the end of 2020, when Abu Dhabi's former Supreme Petroleum Council mandated the national oil producer to become a leader in the production of hydrogen.

The UAE and ADNOC are eyeing hydrogen exports mainly to Asian countries and companies. ADNOC has also signed hydrogen agreements with Japan's Ministry of Economy, Trade and Industry or METI and South Korea's GS Energy.

In April, the UAE energy ministry signed a cooperation agreement with METI under which Tokyo will consider developing an international hydrogen supply chain with the UAE under its first bilateral hydrogen cooperation deal as it accelerates efforts to deploy the large-scale use of hydrogen.

In January, METI struck the first fuel ammonia cooperation deal with ADNOC as Tokyo intends to develop its supply chain of the commodity, possibly in the Middle East, by the late 2020s.

The UAE's energy ministry, ADNOC, sovereign wealth funds ADQ and Mubadala Investment Co. formed a hydrogen alliance earlier in 2021 to promote the production and use of the fuel in the UAE and ultimately to export markets.