A joint study agreed July 8 between state-owned Japan Oil, Gas and Metals National Corp., Japan's INPEX and JERA as well as the UAE's Abu Dhabi National Oil Co. will explore the possibility of producing 1 million mt/year of blue ammonia in Abu Dhabi and transporting it to Japan, a Jogmec source told S&P Global Platts.
The agreement follows the 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.
The joint study will look at producing blue ammonia from natural gas and most of the CO2 emitted from the ammonia production will be sequestered and utilized in enhanced oil recovery (EOR) operations at Abu Dhabi onshore oil fields in which INPEX, Japan's largest upstream company, has a participating interest.
An INPEX spokesman said that the joint study will last until around November.
The agreement to pursue the joint study was reached during a bilateral meeting between Japan's METI Minister Hiroshi Kajiyama and ADNOC CEO and UAE Minister of Industry and Advanced Technology Sultan al-Jaber.
During the meeting, the ministers reviewed joint efforts between both countries to enhance industrial cooperation and drive new opportunities for partnerships in hydrogen, renewables, and climate change, ADNOC said separately.
"As we increase our focus on the potential of new lower carbon fuels and navigate the energy transition, the UAE and ADNOC are keen to build and strengthen our existing partnerships and seize growth opportunities with Japan that can help produce more energy with fewer emissions," Jaber said in a statement.
"This joint study agreement with INPEX, JERA and Jogmec provides a roadmap for us to deepen access to Japanese markets for ADNOC's products and further strengthen the UAE's hydrogen value proposition."
ADNOC said Japan is its largest international importer of oil and gas products with approximately 25% of its crude oil imported from the UAE.
Japan aims to introduce 3 million mt/year of fuel ammonia by 2030, equivalent to 500,000 mt/year of hydrogen, by lowering ammonia supply costs.
JERA, Japan's largest power generation company, said in May it plans to procure 30,000-40,000 mt of ammonia by fiscal year 2024-25 (April-March), as it starts 20% co-firing at its No. 4 1 GW coal-fired unit at the Hekinan thermal power plant in central Japan for a pilot project.
JERA said at the time it will move ahead to start a four-year pilot project until March 2025 to burn 20% ammonia at its Hekinan coal-fired power plant, the first in the world to use a large commercial coal-fired power plant for co-burning ammonia, as it pledges to commercialize its ammonia co-burning power generation by 2030.
Japan aims to lower ammonia supply costs to Yen high-10s/normal cu m-H2 by 2030 by developing stable supply chains under the Green Growth Strategy for 2050 Carbon Neutral. The current cost is around Yen low-20s/normal cu m-H2.
Japan has estimated that its demand for fuel ammonia in the power and shipping sectors will reach 30 million mt/year in 2050, equivalent to 5 million mt/year of hydrogen, after introducing it commercially in the 2020s by developing new supply chains.
Ammonia, which consists of three hydrogen atoms and one nitrogen atom, is about 18% hydrogen by weight. There are no carbon emissions when ammonia is burned in a thermal power plant, or a shipping engine. Ammonia is considered to be among the prospective zero emission fuels that will help reduce greenhouse gas emissions.
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