Adnoc sells first shipment of blue ammonia to Japan's Itochu

State energy company signed an agreement with Japanese entities in July to explore the commercial production of blue ammonia in the UAE

A fertiliser plant in Ruwais. Ammonia, which is used in fertiliser production, allows for the easy transport of hydrogen Adnoc

Adnoc sold its first shipment of blue ammonia, which was produced in partnership with Fertiglobe, to Japanese trading house Itochu for use in fertiliser production.

The sale comes after Adnoc’s preliminary agreement in July with Japanese companies to explore the commercial production of blue ammonia in the UAE.

Blue ammonia is a more easily transportable fuel source made from blue hydrogen, a by-product of carbon dioxide that has been captured and stored.

The blue aspect refers to hydrogen derived from natural gas feedstocks.

The sale of blue ammonia for fertiliser purposes is part of the UAE's "expanding position" in the production of hydrogen and its carrier fuels, said Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and managing director and group chief executive of Adnoc.

"Through the expansion of our capabilities across the blue ammonia value chain, we look forward to furthering our legacy as one of the world’s least carbon-intensive hydrocarbon producers and supporting industrial decarbonisation with a competitive low-carbon product portfolio," he said.

Fertiglobe, a joint venture between Adnoc and OCI, is developing a large blue ammonia plant in the UAE’s downstream centre in Ruwais. The plant will have a production capacity of 1,000 kilotonnes a year.

The shipments to Itochu were "were sold at an attractive premium to grey ammonia", Adnoc said. The pricing underscores favourable economics for blue ammonia as a low-carbon alternative to conventional ammonia.

The cargo to Japan came from the planned scale-up of blue ammonia manufacturing capabilities in Abu Dhabi, which is also expected to include a low-cost "debottlenecking" programme.

"As a result of decarbonising the feedstock supply, we can materially reduce the carbon intensity of our downstream customers along the value chain and across a wide range of industries," said Nassef Sawiris, executive chairman of OCI and chief executive of Fertiglobe.

The UAE is drawing up a comprehensive road map to position itself as an exporter of hydrogen and tap into the clean fuel’s potential.

Globally, the size of the hydrogen industry is expected to hit $183 billion by 2023, up from $129bn in 2017, according to Fitch Solutions.

French investment bank Natixis estimates that investment in hydrogen will exceed $300bn by 2030.

Adnoc, Mubadala and ADQ are part of an alliance to develop a hydrogen economy in the UAE. Adnoc already produces 300,000 tonnes of hydrogen on an annual basis for its downstream operations and plans to increase its output significantly.

The company plans to expand its capacity to manufacture the clean gas to more than 500,000 tonnes.