Japan's ENEOS, Mitsui agree to study large hydrogen project with UAE's ADNOC

Japan's ENEOS and Mitsui have agreed with the UAE's Abu Dhabi National Oil Company to launch a joint study to evaluate the development of a large commercial 200,000 mt/year clean hydrogen supply chain between the UAE and Japan, the companies said in a joint statement June 7.

The agreement was signed during a ceremony held in Tokyo earlier in the day that was attended by ADNOC Group CEO and UAE Minister of Industry and Advanced Technology Sultan al-Jaber and Japan's Minister of Economy, Trade and Industry Koichi Hagiuda.

The project aims to export blue hydrogen from the UAE to Japan in the form of methylcyclohexane (MCH) as a carrier once developed.

The three companies aim to develop the project in two phases, with the first phase utilizing by-product hydrogen from ADNOC's system in the Ruwais Industrial Area in Abu Dhabi and the second using greenfield blue hydrogen production from natural gas.

The three companies will conduct technical and engineering verification of a hydrogen production facility with a capacity of 50,000 mt/year and a feasibility study on the potential to expand this facility to commercial production of 200,000 mt/year.

The companies will consider timelines for a commercial startup of the 200,000 mt/year supply after completing a year-long verification process and feasibility study, an ENEOS spokesperson said.

The latest hydrogen supply chain development came a day after Japanese refiner Cosmo Oil said it has signed an agreement with ADNOC, in partnership with Fertiglobe, for the purchase of blue ammonia produced in Abu Dhabi.

During a meeting with Jaber, Hagiuda affirmed the importance of seeking a balanced approach to the energy transition, while ensuring energy security amid increasing significance of stable energy supply following Russia's invasion of Ukraine, METI said in a statement.

At the meeting, Hagiuda also called for cooperation in stabilizing international crude oil markets via seeking sufficient crude oil supply from increased production and investment in spare production capacity, METI added.

OPEC's third biggest producer is accelerating the development of low-carbon hydrogen projects as it seeks to implement its net zero emissions target by 2050.

Hydrogen ambitions

ADNOC has been beefing up ties with Japan and working on ammonia and hydrogen deals with the Asian country as part of the UAE's plans to supply 25% of the world's low-carbon hydrogen by 2030.

Last year, ADNOC sold blue ammonia cargoes to Japan's INPEX, Idemitsu and Itochu, without disclosing the size or value of the deals.

More recently, Japan's Mitsui and South Korea's GS Energy agreed to take stakes in a 1 million mt/year blue ammonia plant being developed at Ruwais, building on the commercial ties they have developed with ADNOC, the companies announced Nov. 16.

The deal also includes an off-take agreement for Mitsui and GS Energy to purchase "significant volumes of low-carbon blue ammonia."

The agreement follows a joint study agreed July 8 between state-owned Japan Oil, Gas and Metals National Corp., INPEX and JERA as well as ADNOC to explore the possibility of producing 1 million mt/year of blue ammonia in Abu Dhabi and transporting it to Japan, a Jogmec source previously told S&P Global Commodity Insights.

The agreement came on the heels of METI's first fuel ammonia deal in cooperation with ADNOC in January 2021, as Tokyo intends to develop its supply chain of blue ammonia, possibly in the Middle East, by the late 2020s.

Japan sees great potential in fuel ammonia as a CO2 zero-emission fuel as the country aims to cut its greenhouse gas emissions by 46% by FY 2030-31 from the FY 2013-14 level and achieve 2050 carbon neutrality.

Japan currently estimates ammonia demand for power generation at 3 million mt/year in 2030 and expects it to grow to 30 million mt/year in 2050, equivalent to 1.5 times the current international trade of ammonia as a fertilizer, according to METI.

The UAE already has several hydrogen and ammonia projects underway and is targeting a large share of key export markets, including Japan, South Korea, Germany and India, as well as other markets it identifies as being of "high potential" in Europe and East Asia.

Hydrogen UAE PEM electrolysis on June 6 was $6.4544/kg, unchanged on the day, according to assessments by Platts, part of S&P Global Commodity Insights.