Abu Dhabi National Oil Company will develop a massive blue ammonia project its downstream centre in Ruwais as it looks to increase the UAE's hydrogen economy.
The company is working on the design phase of the plant at the Ta’ziz industrial complex, which is being developed in partnership with state holding company ADQ.
The plant will have a production capacity of 1,000 kilotonnes a year, Adnoc said on Monday.
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 the hydrogen derived from natural gas feedstocks.
“This is a significant milestone in the development of our blue hydrogen and ammonia business, building on the UAE’s strong position as a producer of competitive, low-carbon natural gas and our leadership role in carbon capture and underground storage,” said Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and managing director and group chief executive of Adnoc.
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 manufacturing capacity for the clean gas to more than 500,000 tonnes.
The blue ammonia plant will have synergies with Adnoc’s carbon capture project at Al Reyadah, which stores up to 800,000 tonnes of carbon dioxide from local steel production.
UK contractor Wood is undertaking front-end engineering and design work on the ammonia project. The company is also working on six other chemical projects the Ta'ziz complex.
Adnoc will also undertake a study on the feasibility of supplying the project with blue hydrogen from its downstream operations in Ruwais.
The final investment decision on the project is expected next year, with the start date scheduled for 2025.
Adnoc and ADQ plan to collaborate on projects worth $5 billion at the Ruwais Derivatives Park.
Ta’ziz will invest in chemical projects worth $3bn, with $2bn expected to be spent on the development of the port and infrastructure at Ruwais.
Gulf oil exporters such as the UAE and Saudi Arabia are trying to develop hydrogen as a viable clean fuel to power their economies.
Ammonia is an efficient method of both storing and transporting hydrogen.
It can be used as a fuel for a range of industrial applications, such as steel, cement or fertiliser production. It can also be used for industrial heating, generating power or as fuel for ships and other heavy equipment.
Oman’s state-owned oil company OQ said this month that it is developing one of the largest green hydrogen plants in the world.
The project, which will be built in partnership with Hong Kong-based InterContinental Energy and Kuwaiti clean energy investor EnerTech will be powered by 25 gigawatts of renewable energy.