Fertiglobe, a joint venture between Adnoc and OCI, will join the development of a large blue ammonia plant in the UAE’s downstream centre in Ruwais.
Fertiglobe will join the development in the Ta'ziz Industrial Chemicals Zone within Ruwais, which is being developed by Adnoc and holding company ADQ to manufacture downstream products.
“This is a significant milestone in the development of our blue hydrogen and ammonia business and capitalises on the strong foundation that Adnoc has developed with Fertiglobe,” said Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and managing director and group chief executive of Adnoc.
“We believe hydrogen and its carrier fuels such as ammonia offer strong potential as low-carbon energy sources.”
Last month, Adnoc announced the development of the blue ammonia project to advance the UAE's hydrogen economy.
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 hydrogen derived from natural gas feedstocks. The plant will have a production capacity of 1,000 kilotonnes a year.
In May, Adnoc and OCI announced preparations for a potential listing of Fertiglobe.
Adnoc holds a 42 per cent stake in Fertiglobe, with OCI retaining the majority 58 per cent interest. OCI is listed on the Euronext Amsterdam exchange and has Egyptian billionaire Nassef Sawiris as its biggest shareholder. Microsoft founder Bill Gates also owns a 6 per cent stake in the company.
Ta'ziz and Fertiglobe will undertake feasibility and design work to study the potential to develop blue ammonia. The final investment decision on the project is expected in 2022, with start-up targeted for 2025.
The blue ammonia venture "fits well in our strategy to decarbonise our global and regional platforms," said Mr Sawiris, who is executive chairman of OCI and chief executive of Fertiglobe.
"It helps grow our low-carbon and clean fuels product offering, which includes our fast-growing biofuels business," he said.
The Dutch company is building a blue ammonia plant in Texas with an annual output of 365,000 tonnes.
The Abu Dhabi venture will also help boost both OCI and Fertiglobe's position in ammonia, Mr Sawiris said.
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.
"Ammonia is a versatile and clean hydrogen carrier, with many exciting fuel applications, in addition to a diverse array of fertiliser and downstream industrial uses," Mr Sawiris said.
The use of ammonia as a shipping fuel is particularly promising as it is, together with methanol, the only practical alternative for long-distance shipping to decarbonise in a cost-effective way, he added.
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.