Abu Dhabi Chemicals Derivatives Company, better known as Ta’ziz, has signed an agreement to develop a low-carbon ammonia plant with the capacity of about a million tonnes per year in Ruwais.
Ta'ziz has signed a shareholder agreement with Fertiglobe, South Korea’s GS Energy and Japan’s Mitsui for the project, which will be in the Ta'ziz Industrial Chemical Zone, the company said on Wednesday.
“This is a significant milestone in the development of our low-carbon ammonia business and further strengthens the UAE’s hydrogen value proposition,” said Ta'ziz's acting chief executive Khaleefa Al Mheiri.
“We are building on the collective strengths of our partners and shareholders to develop the first-of-its-kind large-scale, low-carbon ammonia project in the Middle East and North Africa.”
Ta’ziz comprises three zones: an industrial zone that will host chemicals production, a light industrial zone housing downstream conversion industries that will convert the output of the chemicals zone into consumable products, as well as an industrial services zone that will have a variety of companies.
Ammonia, which is used in everything from fertilisers and cleaning products to processes such as water purification and refrigeration, offers many decarbonisation opportunities.
Power plants could potentially use 100 million tonnes of low-carbon ammonia as feedstock by 2050, according to Wood Mackenzie.
It is also used to transport hydrogen over long distances.
On Tuesday, Adnoc signed a preliminary agreement with the engineering unit of Germany's Thyssenkrupp to create new markets for hydrogen and explore the development of projects for large-scale ammonia cracking.
The state oil company shipped its first low-carbon ammonia cargo to Germany in September last year.
“As we continue to grow our manufacturing base in Al Ruwais, the UAE is well placed to meet increasing global demand for chemicals while strengthening our position as a world-scale chemicals and industrial hub,” said Mr Al Mheiri.
Site preparation is “under way” for the first phase of projects at the Ta'ziz Industrial Chemical Zone, Adnoc and ADQ, majority shareholders in the industrial zone, said in November.
The projects — which include a $2 billion chlor-alkali, ethylene dichloride and polyvinyl chloride plant, a blue ammonia plant and a methanol plant — are currently at the design stage.
The final investment decisions on these big industrial projects, which are set to begin operations in 2025, are expected before the end of 2022.
The chemicals sector is an integral part of the UAE's Operation 300bn initiative, which aims to raise the contribution of the country's industrial sector to its gross domestic product to Dh300 billion by 2031.
Ruwais, which is at the centre of Adnoc’s downstream ambitions, has been earmarked for a multibillion-dollar expansion that will expand its refining capacity to 1.5 million barrels per day by 2025, from the current 922,000 bpd, making it the largest refiner in terms of capacity.
Oil and gas companies worldwide have been investing heavily in the production of petrochemicals, used in everything from plastics to clothing.
Petrochemicals are set to account for more than a third of the growth in world oil demand to 2030, and nearly half the growth to 2050, adding about 7 million bpd by the end of this decade, according to the International Energy Agency.
