Adnoc sells blue ammonia to Japan's Inpex

The Japanese company is a developer of upstream concessions in Abu Dhabi

Adnoc blue ammonia shipment was sold at "an attractive premium" to grey ammonia. Courtesy: Adnoc

Abu Dhabi National Oil Company has sold a shipment of blue ammonia to Japanese company Inpex, as part of its push into the emerging hydrogen economy.

Blue ammonia is a chemical compound produced using hydrogen, manufactured through steam methane reformation. Ammonia is one of the easiest ways to store and transport hydrogen.

The shipment will be used in power generation, Adnoc said in a statement.

Japan's Inpex develops upstream concessions offshore Abu Dhabi.

Fertiglobe, the joint venture between Adnoc and Amsterdam-listed 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 shipment was sold at "an attractive premium" to grey ammonia, according to Adnoc.

Grey ammonia is produced from fossil fuel-powered hydrogen. While traditionally cheaper than other forms of hydrogen or ammonia, it has a relatively higher carbon footprint.

This is Adnoc's third sale of blue ammonia to a Japanese company this month.

The company also sold the compound to Idemitsu for use in the company's refining and chemicals operations, as well as to trading house Itochu for use in fertiliser production.

The sale came after the signing of a preliminary agreement in July with Japanese companies to explore the commercial production of blue ammonia in the UAE.

Hydrogen plays an important role in industrial decarbonisation in Japan.

Gulf oil exporters such as Saudi Aramco and Adnoc are looking to capitalise on their existing crude oil trading relationships with buyers in Asia to sell hydrogen. The oil producers are prioritising the production and sale of the cleaner gas as a low-carbon alternative to fossil fuels.

Adnoc is part of an alliance with other Abu Dhabi entities such as Mubadala and holding company ADQ to develop a hydrogen economy in the UAE.

The state oil company produces 300,000 tonnes of hydrogen on an annual basis for its downstream operations and plans to increase its output significantly.