Lotte Chemical: high ambitions for the South Korean ammonia market

By Geofrey Njovu on April 03, 2023

OCI Global to supply clean ammonia to Korea

Lotte Fine Chemical has partnered with OCI Global for a multi-year supply of both CCS- based and renewable ammonia to Korea, via the Port of Ulsan. Source: Cruise Mapper.
Click to learn more. Lotte Fine Chemical has partnered with OCI Global for a multi-year supply of both CCS- based and renewable ammonia to Korea, via the Port of Ulsan. Source: Cruise Mapper.

OCI has signed an MoU with Lotte Fine Chemical for the supply of low-carbon and renewable ammonia, with first shipments to begin this year from OCI’s US production facilities. The pair also plan to build a global supply chain for the bunkering for ammonia-powered vessels, expected to be operational from 2025.

The ammonia supplies will come from OCI’s Texas-based, low-carbon ammonia facilities (one currently operational, the other under construction until 2025). Future supplies will also be expected from Fertiglobe’s1 Egyptian renewable ammonia production facility, which recently commissioned its first phase.

Lotte Fine Chemical aims to leverage its existing ammonia tank facilities at the Port of Ulsan to accelerate development of a global supply chain for the bunkering of ammonia-powered vessels. OCI also plans to leverage its own existing infrastructure to help establish this network, including its ammonia storage tanks located in Rotterdam, near Suez in Egypt, and in the US Gulf.

We are pleased to work with Lotte Fine Chemical. Korea is rapidly becoming an important market for clean ammonia in the power and chemicals sectors in particular, and can become an important bunkering hub for clean ammonia in Asia.

Ahmed El-Hoshy, OCI Global and Fertiglobe CEO in his organisation’s official press release, 17 March 2023

As part of its clean ammonia supply chain construction project undertaken by Lotte Chemical Unit, we signed the MOU with OCI, a company which has a global competitive edge in terms of ammonia production and global infrastructure, in order to respond to demand increase not only of mixed fuels for conventional power plants but also of ammonia bunkering. We will lead changes in market by preparing for the upcoming clean hydrogen/ammonia age in advance.

Kim Yong-seok, Lotte Fine Chemical CEO in OCI Global’s official press release, 17 March 2023

CF Industries becomes Lotte Chemical Corporation’s US clean ammonia project partner

CF Industries’ under-construction CCS facility at Donaldsonville, south-eastern Louisiana. A new agreement with Lotte Chemical will see the pair explore new production projects on the US Gulf Coast, with potential off take to Korea. Source: CF Industries.
Click to learn more. CF Industries’ under-construction CCS facility at Donaldsonville, south-eastern Louisiana. A new agreement with Lotte Chemical will see the pair explore new production projects on the US Gulf Coast, with potential off take to Korea. Source: CF Industries.

Lotte Chemical has joined the growing list of ammonia energy giants heading to the US Gulf Coast to capture opportunities in both CCS-based and renewable ammonia projects. The chemicals group has signed an MoU with CF to engage in a joint exploration of clean ammonia production and long-term off take into South Korea.

The two believe the U.S. offers considerable advantages, including easy access to cheap natural gas, favourable geology for carbon sequestration and a suitable regulatory and legal environment. They will also quantify expected clean ammonia demand in South Korea to ascertain long-term off take expectations.

Lotte Chemical aims to develop a global clean ammonia supply chain to support its growing hydrogen energy business. It plans to produce and sell 1.2 million tonnes of clean hydrogen by investing a total of 6 trillion won (~US$4.6billion) by 2030.

At its Donaldsonville Complex, CF Industries is constructing a CCS facility which will enable the permanent sequestration of up to 2 million tonnes of CO2 annually from 2025, and a 20,000 tonne-capacity renewable ammonia facility (expected to run from 2024). At its Blue Point Complex in Louisiana, CF has commenced a FEED study to construct a greenfield, CCS-based ammonia facility.

We look forward to helping LOTTE and South Korea meet their clean ammonia requirements as we continue to accelerate the world’s transition to clean energy.

Tony Will, President and CEO, CF Industries Holdings in his organisation’s official press release, 28 February 2023

Through strategic collaboration with CF Industries, which has a long history and business experience, we will secure a production base in the USA and lead the global distribution channel.

Jin-koo Hwang, Head of hydrogen energy business at LOTTE CHEMICAL in CF Industries’ official press release, 28 February 2023

Footnotes

1. Fertiglobe is a strategic partnership between OCI Global and the Abu Dhabi National Oil Company to develop and distribute renewable ammonia and nitrogen fertilizer