ACWA Power will develop a 150,000 tonnes-per-year renewable ammonia project in Indonesia, powered by 600 MW of wind and solar energy. The Saudi-based company also commenced construction on the first phase of its 500,000 tonnes-per-year renewable ammonia project in Uzbekistan, and has progressed development of a renewable mega-project near the Suez Canal.
The million-tonne-per-year, $8.4 billion renewable hydrogen & ammonia production facility will be built near Al Muwaileh, Saudi Arabia. Project partner Air Products will act as EPC contractor, and has also secured exclusive ammonia offtake rights from NEOM for thirty years.
Electrolysis-based ammonia production peaked worldwide around 1970, before the economies of scale and cheap gas feedstock led to its decline. With decarbonization and climate-neutral industrial processes now a critical priority, electrolysis-based ammonia production has re-emerged as a long-term solution. From a base of 10,000 tonnes per year worldwide production in 2020, as much as 100 million tonnes per year of electrolysis-based ammonia could be produced by the end of this decade, driven by a dramatic roll-out of renewable energy generation and installed electrolyzer capacity.
Three key first-movers at Ammonia Energy - NEOM, Yara and Fertiberia - have all made significant steps towards green ammonia production in recent times. With the launch of a new subsidiary to develop hydrogen & ammonia production, NEOM can possibly begin construction of its green hydrogen plant this month. Also this week, Yara held a groundbreaking ceremony at Heroya, with the intention to bring green ammonia and fertilisers to market by mid-2023. And a few months ago in December, green hydrogen storage tanks arrived at Fertiberia’s Puertollano ammonia plant, ready for installation.
Air Products will lead construction of a USD 4.5 billion, 20 million cubic metres-per-day blue hydrogen & ammonia production plant in Ascension Parish, Louisiana. Hydrocarbon feedstock will be used to produce hydrogen, with carbon emissions captured and permanently sequestered (the project will be the single largest instance of permanent sequestration in the world).
Last week, Saudi Aramco and the IEEJ attracted significant media attention when they announced that the first “blue” ammonia has been shipped to Japan. Aramco’s celebration of this shipment of 40 tons of ammonia (not 40 thousand or 40 million, just 40 tons) raises many questions, but makes three things clear. First, projects to demonstrate the carbon footprint of specific batches of low-carbon ammonia are now underway, and these case studies will inform the design of an international low-carbon ammonia certification scheme. Second, there is an urgent need to establish definitions across the industry, or risk losing credibility. Third, Aramco (absolutely the most profitable company in the world, with over a hundred oil and gas fields and almost 300 trillion scf of natural gas reserves) has sent a clear signal that it intends to make and sell ammonia as a decarbonized energy commodity.
Last week, Air Products, ACWA Power, and NEOM announced a $5 billion, 4 gigawatt green ammonia plant in Saudi Arabia, to be operational by 2025. Air Products, the exclusive off-taker, intends to distribute the green ammonia globally and crack it back to “carbon-free hydrogen” at the point of use, supplying hydrogen refueling stations. According to Air Products’ presentation on the project, “our focus is fueling hydrogen fuel cell buses and trucks.” This will be one of the first projects to be built in the industrial hub of NEOM, a futuristic “model for sustainable living.” NEOM is a key element in Vision 2030, Crown Prince Mohammed bin Salman’s plan to diversify the Saudi Arabian economy and reduce dependence on oil revenues. In other words, Saudi Arabia is establishing itself as “a global leader in green hydrogen production and green fuels.”