Section: CRUNS Industry News

Rapidly escalating natural gas prices forced plant closures across Europe during September. Worst affected was the UK, where a fire at a cross-Channel electricity cable and low output from wind energy has, combined with low domestic storage capacity led to a surge in demand for gas for power stations and wholesale gas prices reached a record 350 pence per therm (equivalent to $46/ MMBtu) in October. On September 15th, CF Industries announced that it was halting operations at both its Billingham and Ince fertilizer plans due to high gas prices. Although ammonia prices have also risen, they have not kept pace with gas price rises, and there is a limit to what farmers could be expected to pay. CF CEO Anthony Will said: “$900 is the gas cost in a tonne of ammonia and the last trade in the ammonia market that was done was $700 a tonne”. As these plants supply most of the UK’s carbon dioxide for food and drink manufacture, the government said it would provide “limited financial support” to keep the Billingham plant operational, and that plant re-started on September 21st. Meanwhile, BASF closed its Antwerp and Ludwigshafen plants in Belgium and Germany due to what the company called “extremely challenging” economics. Fertiberia ceased production at its Palos de la Frontera site in Spain, and Puertellano remained down for scheduled maintenance. Yara shut 40% of its European ammonia production in September, and OCI partially closed its Geleen plant in the Netherlands. Achema in Lithuania decided against restarting its ammonia plant following maintenance in August, and OPZ in Ukraine shut one ammonia line at Odessa, with Ostchem and DniproAzot likely to follow. Borealis in Austria also reduced production.

OCI subsidiary Fertiglobe says that it has partnered with the Abu Dhabi National Oil Company (ADNOC), to enable the sale by ADNOC of the first cargo of blue ammonia to Itochu in Japan, for use in fertilizer production. Fertiglobe, a 58% − 42% partnership between OCI and ADNOC respectively, will produce the blue ammonia at its Fertil plant at Ruwais in Abu Dhabi for delivery to ADNOC’s customers in Japan. This represent the first production milestone of a planned scale-up of blue ammonia production capabilities in Abu Dhabi, which is expected to include a low-cost debottlenecking program at Fertil. In addition, it was announced in June that Fertiglobe will join ADNOC and sovereign wealth fund ADQ as a partner in a new world-scale 1.0 million t/a blue ammonia project at Ta’Ziz in Ruwais, subject to regulatory approvals. The design contract for this project has been awarded, with a final investment decision expected in 2022 and start-up targeted for 2025. A feasibility study was also agreed in July betweenh the state-owned Japan Oil, Gas and Metals National Corp. (Jogmec), Inpex and JERA as well as ADNOC to explore the possibility of producing 1.0 million t/a of blue ammonia in Abu Dhabi and transporting it to Japan.

The UK has published its Hydrogen Strategy, setting out the government’s ambition to create a low carbon hydrogen sector, with up to one third of the UK’s energy consumption being hydrogen-based by 2050. The commitments set out in the strategy unlocks £4 billion of government investment by 2030. The government plans 5GW of low carbon hydrogen production capacity and the establishment of carbon capture, use and storage (CCUS) in four industrial clusters by 2030, as well as blending of hydrogen into the existing gas network and a ‘twin-track’ approach to hydrogen production, using both electrolytic and CCUS-enabled low carbon hydrogen production in order to scale up production in time to meet the UK’s 2030 and 2050 carbon emissions targets.

A consortium has unveiled plans to build one of the largest green hydrogen plants in the world in a bid to make Oman a leader in renewable energy technology. The $30 billion project is being developed by Oman’s state-owned oil firm OQ, green fuels developer InterContinental Energy and Kuwait government-backed renewables investor EnerTech. Construction is scheduled to start in 2028 in Al Wusta governorate on the Arabian Sea. It will be built in stages, with the aim to be at full capacity by 2038, powered by 25 GW of wind and solar energy. Two years has already been spent on solar and wind monitoring analysis for the development. According to the consortium, the site chosen has the optimal diurnal profile of strong wind at night and reliable sun during the day, and is also located near the coast for seawater intake and electrolysis.

Maire Tecnimont SpA says that its subsidiaries MET Development, Stamicarbon and NextChem have collectively begun work on a renewable power-to-fertilizer plant in Kenya. MET Development has signed an agreement with Oserian Development Company for the development of the plant at the Oserian Two lakes Industrial Park, on the southern banks of Lake Naivasha, 100 km north of Nairobi.

The Chemical & Process Technologies business unit of thyssenkrupp Industrial Solutions is celebrating a milestone in 2021. It is one hundred years since engineer and entrepreneur Friedrich Uhde founded his own plant engineering company in a barn at his parents-in-law’s farm in Dortmund-Bövinghausen on April 6th, 1921. Now, in this centenary year, the origins of the firm are to become visible in its name again: thyssenkrupp is changing the business unit’s name to thyssenkrupp Uhde.

A recent report from BloombergNEF (New Energy Foundation) looking ahead to 2050 argues that green hydrogen can be cheaper than natural gas. It finds that ‘green’ hydrogen from renewables should become cheaper than natural gas (on an energy-equivalent basis) by 2050 in 15 of the 28 markets modelled, assuming scale-up continues. These countries accounted for one-third of global GDP in 2019. In all of the markets BNEF modelled, ‘green’ hydrogen should also become cheaper than both ‘blue’ hydrogen (from fossil fuels with carbon capture and storage – CCS) and even ‘grey’ hydrogen from fossil fuels without CCS. The cost of producing ‘green’ hydrogen from renewable electricity should fall by up to 85% from today to 2050, the report predicts, leading to costs below $1/kg ($7.4/MMBtu) by 2050 in most markets. These costs are 13% lower than BNEF’s previous 2030 forecast and 17% lower than their previous 2050 forecast. Falling costs of solar photovoltaic (PV) electricity are the key driver behind the reduction; BNEF now believes that PV electricity will be 40% cheaper in 2050 than they had thought just two years ago, driven by more automatic manufacturing, less silicon and silver consumption, higher photovoltaic efficiency of solar cells, and greater yields using bifacial panels.

The Nigerian National Petroleum Corporation (NNPC) says that it plans to build a $3 billion methanol plant on Brass Island in the Niger Delta to produce up to 10,000 t/d of methanol using from gas supplied by Shell. A final investment decision was made by NNPC, DSV Engineering and the Nigerian Content Development and Monitoring Board, a state agency set up to ensure Nigerian involvement in oil and gas projects. Around 70% of funding for the project will come from international lenders, including the China Export-Import Bank, the African Development Bank and international commercial banks, with the rest funded from an equity issue. BP has signed a 10 year offtake deal for the plant’s output with the Brass Fertilizer & Petrochemical Company, the entity set up to operate the plant. Construction of the plant is expected to be completed by 2025.

Copenhagen Infrastructure Partners (CIP) has unveiled plans to build Europe’s largest power-to-ammonia facility at the Danish port of Esbjerg, based on electricity from offshore wind turbines. The company said the plant will consist of 1GW of electrolysis capacity, capable of supplying sufficient hydrogen to produce 300,000 t/a of ammonia, and that the ammonia will be used as both as agricultural fertiliser and as fuel for the shipping industry. Excess heat generated in the process would be used to provide heating for around one third of local households in communities around the plant, to be sited on the west coast of Denmark. The company has signed a memorandum of understanding for the project with companies from both the agriculture and shipping sectors, including Danish Crown, Arla, DLG, Maersk and DFDS Seaways. CIP anticipates that it would cost approximately $1.2 billion to build the facility. They are currently seeking investors for the project and expect that the investment decision would be reached by 2023. The plant could enter commercial operations in 2026.

Johnson Matthey (JM) has secured a multiple licence for China’s Ningxia Baofeng Energy Group’s latest project to develop five of the largest single train methanol plants in the world. Located at Baofeng’s Ordos City complex in Inner Mongolia, the five plants each have a planned capacity 7,200 t/d. Under the agreement Johnson Matthey will be the licensor of all five plants and supplier of associated engineering, technical review, commissioning assistance, and catalyst. The plants will take synthesis gas as a feed and use JM radial steam raising converters in a patented series loop. Within the design, there is potential for 1-2% more feedstock efficiency over the life of the catalyst. Thanks to JM’s methanol loop synthesis technology, the plants will provide enhanced energy savings along with low OPEX, CAPEX and emissions. When complete, the plants will represent JM’s 13th operating license in China for a mega-scale plant (>5,500 t/d) and the fourth JM methanol design licensed by Ningxia Baofeng Energy.