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ADNOC sells blue ammonia cargo to INPEX as clean energy push gathers pace


Third blue ammonia deal with a Japanese customer this month

INPEX in talks to sell cargo to JERA, according to source

ADNOC is boosting blue ammonia production

  • Author
  • Dania Saadi    Takeo Kumagai
  • Editor
  • Alisdair Bowles
  • Commodity
  • Coal Energy Transition Natural Gas Oil Metals Petrochemicals

Abu Dhabi National Oil Co. has sold a blue ammonia cargo to Japan's INPEX for use in power generation, as the UAE's biggest energy producer boosts supply of the clean product to one of its top export countries.

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Fertiglobe, a 58-42 partnership between Netherlands-listed chemical firm OCI and ADNOC, will produce the blue ammonia from its Fertil plant in the industrial hub of Ruwais in the emirate of Abu Dhabi, ADNOC said in an Aug. 18 statement. ADNOC did not disclose the size or the value of the sale.

This is INPEX's first procurement deal for blue ammonia, and it comes on the heels of ADNOC striking similar deals with fellow Japanese companies Itochu and Idemitsu earlier in August.

INPEX expects to load the cargo from Abu Dhabi in October to ship to Japan, an Inpex spokesman told S&P Global Platts.

The spokesman said the company was looking to use the blue ammonia as a power generation fuel, including for demonstration purposes, but declined to name its prospective customer as talks are in progress.

A source familiar with the talks told Platts separately that JERA, Japan's largest power generation company, was the prospective customer.

Joint study

Abu Dhabi is planning to scale up its blue ammonia production capabilities, which is expected to include a low-cost debottlenecking program at Fertil.

A joint study agreed July 8 between state-owned Japan Oil, Gas and Metals National Corp. (Jogmec), Inpex and JERA as well as ADNOC will 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 Platts.

The agreement follows the Japanese Ministry of Economy, Trade and Industry's first fuel ammonia deal in cooperation with ADNOC in January as Tokyo intends to develop its supply chain of blue ammonia, possibly in the Middle East, by the late 2020s.

Fertiglobe will join ADNOC and sovereign wealth fund ADQ as a partner in a 1 million mt/year blue ammonia project at the TA'ZIZ industrial complex in Ruwais, ADNOC said in June.

The design contract for this project has been awarded, with a final investment decision expected in 2022 and startup targeted for 2025.

The Fertil plant has a production capacity of 1.2 million mt/year of ammonia and 2.1 million mt/year of urea.

Blue ammonia is made from nitrogen and blue hydrogen derived from natural gas feedstocks, with the carbon dioxide byproduct from the hydrogen production captured and stored.

Partnership with INPEX

ADNOC has announced a number of hydrogen agreements since the end of 2020, when Abu Dhabi's top energy decision-making body the Supreme Petroleum Council (now merged into the Supreme Council for Financial and Economic Affairs) 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 and South Korea's GS Energy.

The UAE's energy ministry, ADNOC and 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.

INPEX is a long-time partner of ADNOC's in the upstream business.

INPEX is one of nine companies that are partners with ADNOC and the Intercontinental Exchange in ICE Futures Abu Dhabi, the exchange hosting the Murban crude futures contracts that were launched on March 29.

In 2019, INPEX won exploration rights for ADNOC's Abu Dhabi Onshore Block 4. In 2018, INPEX won a 10% stake in ADNOC's new Lower Zakum offshore concession and was also awarded an extension to its 40% stake in Satah field, and an increase in its shareholding in Umm Al Dalkh field from 12% to 40%. INPEX was awarded a 5% stake in the Abu Dhabi Onshore Concession in 2015.