Fertiglobe has signed a preliminary agreement with German companies Covestro and MB Energy to explore collaboration in the ammonia supply chain as ties between the Emirates and Germany strengthen.
As part of the agreement signed during the visit of President Sheikh Mohamed to Germany, Fertiglobe will explore the potential supply of ammonia through a proposed import terminal to be built and operated by MB Energy in Hamburg. It will also explore potential equity investment in the terminal.
Covestro will evaluate the potential offtake of ammonia delivered through the terminal for use as feedstock in its production of polymer products as well as to meet hydrogen supply requirements.
“This MoU [memorandum of understanding] marks an important step in strengthening Fertiglobe’s connectivity with industrial customers in Europe and expanding routes to market for our global ammonia platform,” said Ahmed El Hoshy, chief executive of Fertiglobe, the world’s largest seaborne exporter of urea and ammonia.
“Together with Covestro and MB Energy, we see an opportunity to support the development of a reliable and competitive ammonia supply chain through Hamburg, in line with our Grow 2030 focus on customer proximity and disciplined growth in lower-carbon ammonia.”
The latest collaboration comes as the UAE, the Arab world’s second-largest economy, and Germany strengthen ties across sectors.
The UAE on Thursday announced investments worth €40 billion ($46.47 billion) in Germany, in a long-term commitment to Europe's biggest economy, during Sheikh Mohamed's visit.
The money will be used across sectors including industry, advanced technology, artificial intelligence, digital infrastructure and energy.
The latest investment is on top of UAE's existing investment in Germany worth €34 billion.
As part of the agreement, the three companies will jointly assess the commercial, technical and logistical requirements for the potential supply of ammonia via Hamburg, including terminal capacity, volumes, delivery arrangements and onward transportation to industrial customers. They will also evaluate enabling infrastructure and logistics, including pipelines, barges and rail transportation.
Ammonia, a compound of nitrogen and hydrogen, can be used as a low-carbon fuel for industries including transport, power generation and steel, cement and fertiliser production. It is also an essential feedstock for the chemical industry and can serve as a carrier of hydrogen.
Its importance has grown as countries seek to cut emissions to limit global warming.
The UAE and Germany are working closely to advance the energy transition within the Emirati-German Energy Partnership. The Emirates aims to achieve net zero emissions by 2050, while Germany aims to reach the target by 2045.
“Ammonia is an essential building block for the chemical industry – and its carbon footprint matters for the transformation of our production,” Markus Steilemann, chief executive of Covestro, said. “Securing reliable, competitive and increasingly low-carbon ammonia is therefore a strategic priority for Covestro.”
Abu Dhabi-listed Fertiglobe has a production capacity about of 6.6 million tonnes of urea and merchant ammonia, produced at four subsidiaries in the UAE, Egypt and Algeria, making it the largest producer of nitrogen fertilisers in the Middle East and North Africa.
Adnoc's global energy investment arm XRG holds 95.1 per cent stake in Covestro following a deal last year.
