- Fertiglobe has signed an agreement with Scatec, a leading renewable power producer headquartered in Norway, and the Sovereign Fund of Egypt (“TSFE”) to develop a 50-100 MW electrolysis plant at EBIC in Egypt to produce up to 90,000 metric tons green ammonia per annum
- Fertiglobe, an early mover in clean ammonia, is set to benefit from emerging demand for clean ammonia as part of the energy transition
- Project leverages Fertiglobe’s established ammonia platform, highlighting its unique position to capture opportunities in both blue and green ammonia
- Egypt is ideal location given strong solar and wind corridor and close proximity to markets with hydrogen deficit, allowing for robust future growth of hydrogen production using attractive renewable energy
OCI N.V. (Euronext: OCI) today announced that Fertiglobe, the partnership between OCI and Abu Dhabi National Oil Company (ADNOC), has entered into an agreement with Scatec ASA (OSE: SCATC) and TSFE to jointly develop a 50-100 MW electrolyzer facility to produce green hydrogen as feedstock for green ammonia production. The facility will be located near Fertiglobe’s subsidiary EBIC in Ain Sokhna in Egypt and is a first step towards developing a green hydrogen hub in Ain Sokhna.
Under the agreement, Scatec will build, operate and majority own the facility, and EBIC will use the green hydrogen as a supplementary feedstock for the production of up to 90,000 metric tons green ammonia (NH3) per annum under a long term off-take agreement. The Final Investment Decision is expected in 2022, and start-up is targeted for 2024.
Ahmed El-Hoshy, CEO of OCI N.V. and CEO of Fertiglobe, commented: “We are pleased to partner with Scatec, a leader in the global renewables market and Egypt’s largest renewable power developer, to deploy cutting edge technology at world scale to start ramping up our green ammonia production profile. We are also pleased that the Sovereign Fund of Egypt is participating, underlining Egypt’s commitment to become a global leader in the renewables space. This project adds to our existing and rapidly developing low carbon portfolio of ammonia across our global platform, and Fertiglobe in particular is increasingly becoming the ideal springboard to capture the huge growth opportunities offered by the hydrogen economy.”
Raymond Carlsen, CEO of Scatec said: “We are proud to establish a strong partnership with Fertiglobe and the Sovereign Fund of Egypt to move the green agenda forward in Egypt. The development of this green hydrogen project builds on our long experience in project development, financing, and delivery of renewable energy projects in emerging markets. New business models and innovation have been at the core of Scatec since our inception, and we see green hydrogen as a natural part of our strategy and the renewable ecosystem in the years to come.”
Ayman Soliman, CEO of TSFE, commented: “We are pleased to be partnering up with Fertiglobe and Scatec who are pioneers in green hydrogen production, to provide a unique investment product that creates financial returns while nurturing the green economy at large. The Sovereign Fund of Egypt is a manifestation of Egypt’s 2030 Vision with the principles of sustainable development and impact investment instilled in its mandate, and this project is a cornerstone investment in our green sustainable portfolio build-up with many more to come.”
The parties will seek support from the Egyptian government for required regulatory approvals and sourcing of competitive renewable power from the grid, with the intention to build out new solar and wind capacity to power Egypt’s green hydrogen ambitions in the years to come. The project will be realised in close cooperation with leading hydrogen technology providers and multilateral development institutions for financing. Required engineering and development, including structuring of commercial agreements for the new facility, will start imminently with a target investment decision in 2022 and start-up of the hydrogen facility by 2024.
Green ammonia, produced from renewable energy such as solar and wind instead of natural gas, is a versatile product that can help decarbonize numerous sectors which represent around 80% of current global Greenhouse Gas (GHG) emissions. Ammonia is an ideal carrier fuel to store and transport hydrogen; it is also emerging as a promising zero-emission fuel for the hard-to-decarbonize shipping sector and is expected to become an important alternative fuel in the power sector in Japan and other countries.
Fertiglobe is well-placed to benefit from this new demand for low carbon ammonia, in addition to the existing uses in fertilizer and industrial applications. Incremental demand for low carbon ammonia from new applications is currently estimated in the range of 8 million tons by 2025, growing to more than 25 million tons by 2030 compared to a current global merchant ammonia market of approximately 20 million metric tons.
The project also demonstrates Fertiglobe’s unique competitive position as an early mover in blue and green ammonia and the advantaged position it holds in becoming a leader within this area:
- The switch from “grey” to “green” ammonia is straightforward through the addition of a “plug-and-play” electrolyzer, as Fertiglobe has all other critical elements in the ammonia value chain in place
- The ability to scale up green capacity gradually by introducing a supplementary feedstock stream, without taking any major supply or technology risks compared to greenfield projects
- Leverages OCI’s and Fertiglobe’s existing leading ammonia production and distribution infrastructure
- Leverages ADNOC’s regional leadership in carbon capture and storage to build up blue ammonia capabilities
- Egypt is well placed to take advantage of the green hydrogen/ammonia opportunity with abundant wind and solar resources for renewable energy generation globally
- EBIC, which has ammonia production capacity of 748 thousand metric tons per year, has direct pipeline connections to Sokhna port, one of the region’s largest export jetties on the Red Sea
- Location on the Red Sea is near the Suez Canal which is ideal given future bunkering potential with ability to go East to deficit Asian markets and West to European markets to serve key importing regions for ammonia
The project represents another milestone in building up Fertiglobe’s low carbon production capabilities. Fertiglobe has recently partnered with ADNOC to sell blue ammonia from the UAE to customers in Japan and announced a 70,000 metric ton scale-up of blue ammonia production capacity through a low-cost debottlenecking program in Abu Dhabi. In addition, it was announced in June that Fertiglobe will join ADNOC and ADQ as partner in a new world-scale 1 million metric tons per annum blue ammonia project at TA’ZIZ in Ruwais, subject to regulatory approvals.