Japan's Ministry of Economy, Trade and Industry struck the first fuel ammonia cooperation deal with state-owned Abu Dhabi National Oil Co. as Tokyo intends to develop its supply chain of blue ammonia possibly in the Middle East by the late 2020s.
The signing of a memorandum of cooperation took place on Jan. 14 during a virtual meeting between METI Minister Hiroshi Kajiyama and ADNOC CEO and the UAE's Minister of Industry and Advanced Technology Sultan al-Jaber, when the ministers agreed to advance bilateral cooperation in areas including hydrogen and fuel ammonia, METI said in a statement.
The memorandum "is another significant development for the UAE as we continue to explore the potential of new fuels that can help us produce more energy with fewer emissions," Jaber said in a separate ADNOC statement.
"Japan is ADNOC's largest international importer of oil and gas products with approximately 25% of its crude oil imported from the UAE and we continue to welcome new and existing Japanese partners to explore win-win investment and growth opportunities in the UAE and across ADNOC's full value chain as we focus on the post-Covid recovery."
The development came just days after Ryo Minami, METI's director-general of oil, gas and mineral resources, told S&P Global Platts on Jan. 8 that Japan intends to develop a supply chain of blue ammonia produced from natural gas possibly in the Middle East by the late 2020s.
Japan has recently formulated the Green Growth Strategy for 2050 Carbon Neutral with action plans including on ammonia following the announced carbon neutrality target by Prime Minister Yoshihide Suga in October.
During the Jan. 8 interview, Minami stressed a need for Japan to develop a new supply chain of fuel ammonia as the 200 million mt/year global supply of ammonia will not be enough once Japan starts using it as a fuel.
2050 energy mix
Ammonia -- three hydrogen atoms and one nitrogen and, thus, about 18% hydrogen by weight -- releases no carbon emissions when combusted in a thermal power plant. It is primarily used as a fertilizer and is a widely traded chemical globally.
By the late 2020s, Japan expects to start using 500,000 mt/year of ammonia as a fuel, co-burning it 20% with coal and boosting it to 3 million mt/year by 2030, according to Minami.
Japan's latest outlook for introducing ammonia as a zero emissions fuel comes as the country has developed technologies to remove NOx when burning it.
METI on Dec. 21 unveiled a proposal for the country's 2050 energy mix as the country gears up to achieve carbon neutrality by 2050, with hydrogen and ammonia accounting for about 10% of the power generation mix in 30 years, from zero currently.
Under the MOC signed by Minami and Khaled Salmeen, ADNOC's executive director of marketing supply and trading, and acting executive director of downstream and industry, METI and ADNOC will accelerate bilateral cooperation in the area of fuel ammonia and carbon recycling by launching working groups to consider business opportunities.
The signing of the MOC marks a step forward in Japan and the UAE's long-time bilateral relationship, which have focused on upstream oil developments, into new energy landscapes. The UAE is the second largest crude supplier to Japan after Saudi Arabia.
Oil-rich Abu Dhabi is also making a clean energy push through ADNOC. The national oil producer's new unit -- Downstream Industry, Marketing and Trading Directorate -- will focus on hydrogen as part of the company's green pivot.
"The directorate will also lead ADNOC activities to capitalize on the emerging global market for hydrogen, building on the company's existing position as a major producer with existing infrastructure, partnerships and customer relationships," ADNOC said Jan. 13.
Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed, vice-chairman of the former Supreme Petroleum Council, has also instructed ADNOC "to explore potential opportunities in hydrogen with the ambition to position the UAE as a hydrogen leader," ADNOC said Nov. 22.
ADNOC is also investing in carbon capture, utilization and storage. Currently ADNOC's Al Reyadah facility has the capacity to capture 800,000 tons of CO2 annually and the company plans to expand the capacity six-fold by capturing CO2 from its own gas plants, with the aim of reaching 5 million tons of CO2 every year by 2030.
In October 2020, Japan also imported the maiden blue ammonia cargo from Saudi Arabia to be used for power generation, with CO2 capturing process designated for use in methanol production at SABIC's Ibn-Sina facility, as well as captured CO2 being used for enhanced oil recovery at Saudi Aramco's Uthmaniyah field.