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Fertiglobe seeks to cash in on potential rise in low-carbon ammonia demand

Acquisition of chemicals makers by Adnoc marks a key milestone in UAE’s net zero goals

Published: Wed 23 Oct 2024, 6:00 AM

Updated: Tue 22 Oct 2024, 9:41 PM

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Ahmed El-Hoshy, CEO of Fertiglobe

Ahmed El-Hoshy, CEO of Fertiglobe

Incremental demand for low-carbon ammonia is expected to reach around 24 million tonnes per annum (mtpa) by 2032, from close to zero today, according to company and industry consultants.

This will be primarily driven by new applications such as power generation, maritime bunker fuel, industry feedstock and as a hydrogen carrier and forms one of the key factors behind Adnoc’s full acquisition of Fertiglobe, Ahmed El-Hoshy, CEO of Fertiglobe, told Khaleej Times in an interview.


“With the completion of this acquisition, Fertiglobe becomes Adnoc’s platform for global growth in low-carbon ammonia. We are pleased to be at the heart of another important milestone in the Group’s chemicals growth strategy, the expansion of its low-carbon fuels business, and its plans to become a top five global chemicals player. As the world’s largest seaborne exporter of urea and ammonia combined, exporting to 53 countries and holding about 10% collective market share of global trade in these products, we believe that we are ideally placed to play a key role in this strategy,” El-Hoshy said.

Decarbonization remains core to Fertiglobe’s business model. “We have already made great progress on some of our key low carbon ammonia initiatives, including securing a contract to supply renewable ammonia to the EU following a first-of-its-kind pilot auction by H2Global, an initiative funded by the German Federal Ministry for Economic Affairs and Climate Action. This saw Fertiglobe awarded a contract to export renewable ammonia from Egypt, from where our assets enjoy easy access to key import hubs,” El-Hoshy said.


Similarly, in partnership with Ta’ziz, GS Energy Corp, and Mitsui & Co, Fertiglobe has taken the final investment decision on the Ta’ziz 1 mpta low-carbon ammonia project, awarding the construction contract to Tecnimont SpA, with production expected to start in 2027. Fertiglobe also played a key role supporting Adnoc in delivering the world’s first-ever certified bulk commercial shipment of low-carbon ammonia enabled by carbon capture and storage to Japan, for use in clean-power generation. This landmark shipment was produced at Fertiglobe’s Abu Dhabi facilities.

By becoming a part of the Adnoc ecosystem, Fertifglobe expects to drive growth within the low-carbon ammonia value chain. “This integration into the Group also provides us with access to Adnoc’s world-class maritime energy logistics capabilities and their leadership in artificial intelligence (AI) to boost our operational efficiencies and technology capabilities, which will support margin expansion and drive incremental Ebitda growth,” El-Hoshy said.

The acquisition elevates Fertiglobe’s future ambitions, making the company a vehicle for Adnoc’s plans to establish a global growth platform for ammonia, poised to meet increasing global demand for low-carbon solutions. As part of this plan, Adnoc will transfer stakes in existing and future low-carbon ammonia projects to Fertiglobe at cost and when ready for startup, creating a world-class growth platform for low-carbon ammonia as a key energy transition fuel. This includes its two lower carbon ammonia projects in Abu Dhabi and other projects in its global portfolio. On a consolidated basis, the two projects in Abu Dhabi would add about 2 mtpa, more than doubling our current merchant ammonia capacity of 1.6 mtpa and increasing our total sellable capacity to 8.6 mtpa of net ammonia and urea combined.

Fertiglobe’s outlook for growth in low carbon ammonia is positive. “The maritime sector is increasingly incentivised to adopt clean fuels, partly due to Fuel EU maritime regulation (starting in 2025), and low-carbon ammonia reduces carbon emissions by about 70 per cent vs. very low sulphur fuel oil, according to consultants. Planned power generation regulation in Japan and South Korea, including a requirement for 20 per cent to 30 per cent co-firing in coal plants by the 2030s, is also expected to generate low carbon ammonia demand, with additional support from policy and subsidy schemes. In Europe, there is significant upside from mandatory targets promoting emissions reduction and the use of green hydrogen in industry.



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