Fertiglobe, the Abu Dhabi-based chemicals joint venture between energy major Adnoc and Netherlands-listed OCI, signed an agreement with Masdar as well as France’s Engie to co-develop a green hydrogen facility in the UAE for the production of ammonia.
As part of the agreement, the three companies will study the development, design, financing, procurement, construction, operation, and maintenance of an industrial-scale and globally cost-competitive green hydrogen facility in Al Ruwais. It will have a potential capacity of up to 200 megawatts and be operational by 2025 with Fertiglobe as the sole long-term off-taker, the company said on Wednesday.
“This new partnership with Masdar and Engie represents a great opportunity for Fertiglobe and the UAE to play a crucial role in the global energy transition and fits well in the UAE’s vision of a diversified and sustainable future,” said Ahmed El Hoshy, chief executive of Fertiglobe.
“Abu Dhabi is an ideal location to produce green hydrogen given the country’s commitment to a low carbon future, its unique renewables profile and its strategic geographic location.”
The companies signed the agreement on the sidelines of Abu Dhabi Sustainability Week in the UAE capital.
Green ammonia, produced from renewable sources such as solar and wind, is an ideal channel to store and transport hydrogen while helping decarbonise many sectors, which account for 90 per cent of current global greenhouse gas emissions.
“With green hydrogen seen as essential to support decarbonisation of industry, food, transport and energy, there is a huge opportunity for green ammonia to deliver green hydrogen all over the world to fuel the clean economy and meet the growing demand for renewable sources of clean energy,” Mr El Hoshy said.
Fertiglobe is the largest producer of nitrogen fertilisers and ammonia in the Middle East and North Africa, with a combined production capacity of 6.7 million tonnes of urea and merchant ammonia. The company raised about $795 million in its initial public offering last year, amid strong demand from international, regional and local investors.
“The production of green hydrogen in the UAE will be a significant milestone in its green transition, helping the country achieve its ambitious net-zero targets for 2050,” said Frederic Claux, managing director of thermal and supply AMEA at Engie.
“Moreover, by supporting the development of green hydrogen projects across the value chain, together with Masdar and Fertiglobe, we will aid the creation of local jobs and give the UAE a competitive edge in the fast-growing hydrogen economy.”
The UAE and other countries in the broader Mena region are pursuing plans to incorporate hydrogen into their energy mix and tap into the clean fuel’s potential for different industrial applications.
Last year, Adnoc, Mubadala Investment Company and Abu Dhabi holding company ADQ formed an alliance to develop a global hydrogen centre. Adnoc subsequently announced plans to build a blue ammonia plant in Ruwais, while Abu Dhabi Ports-owned Kizad said it would invest $1bn in a green ammonia plant.
The UAE is also looking to export hydrogen as demand for clean fuel increases globally amid the energy transition. It aims to capture 25 per cent of the global hydrogen market share.
Masdar also agreed a deal with Japan's Cosmo Energy on Wednesday to explore the development of renewable energy initiatives, including offshore wind projects, in Asia's second-largest economy.
The two companies will work together to develop offshore wind projects which could support Japan’s target of installing as much as 10 gigawatts of offshore wind power by 2030 and as much as 45 gigawatts by 2040.
They will also be looking to develop hydrogen and ammonia-related projects, alongside carbon capture and storage, and carbon capture, utilisation and storage solutions, battery storage technology and energy trading activities, Masdar said.