UAE sells another blue ammonia cargo to Japan in hydrogen push

The United Arab Emirates sold its third shipment of blue ammonia to Japan, as the oil producer looks to build a hydrogen industry and plans for the global energy transition.

Abu Dhabi National Oil Co. will send a cargo to Inpex Corp. for use in power generation in Japan, according to a statement. Fertiglobe, a partnership between Amsterdam-based OCI NV and Adnoc, will produce the fuel in the emirate of Abu Dhabi.

Blue ammonia is made from hydrogen, a gas seen as key to the global energy transition since it emits only water vapor when burned. It’s called a blue fuel because the carbon emissions from the conversion process are captured. Turning hydrogen into ammonia allows it to be shipped more easily.

Several energy companies are investing in such fuels, though they’ve only just started setting up manufacturing, carbon capture and export facilities. Production costs are still far higher than those for oil and gas.

Saudi Arabia’s Aramco, which doesn’t see a global market for blue hydrogen emerging before 2030, sent a trial cargo of blue ammonia to Japan in September.

Abu Dhabi and Saudi Arabia are leading the push among Persian Gulf governments to sell hydrogen and ammonia as the OPEC members seek to leverage their customer relations and supply chains for liquid fuels. Aramco and Adnoc both want to sign long-term supply contracts with buyers in countries such as Japan and South Korea.

Adnoc’s first two cargoes of blue ammonia will be shipped to Itochu Corp. and Idemitsu Corp. They will be sent this year, Adnoc said, without specifying a date. It hasn’t stated the volumes or price for any of the sales.

© 2021 Bloomberg L.P.

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