Early mover advantage
In 2016, Abu Dhabi National Oil Company (ADNOC) established the first commercial-scale carbon capture, utilisation and storage (CCUS) facility in the Middle East. The Al-Reyadah plant was also the world’s first large-scale facility to capture carbon dioxide from the iron and steel industry.
Based on this early mover advantage, ADNOC is now taking a leadership position in hydrogen and its carrier fuels, working with both new and existing clients and partners to see how blue ammonia can be used to decarbonise their industrial feedstock supplies.
General trading company Itochu bought one of ADNOC’s first cargoes of blue ammonia. This will be used to produce low-carbon fertiliser. Petroleum company Idemitsu also bought a cargo to decarbonise its refinery operations, while energy firm INPEX bought another for use in power generation.
The blue ammonia for these pilot runs is being produced by Fertiglobe, a 58:42 partnership between the Netherlands’ OCI and ADNOC, at its Fertil ammonia/urea plant in Ruwais. The carbon dioxide from the ammonia production process is captured and transferred to Al-Reyadah, from where it is injected into ADNOC oil fields.
Other potential applications for blue ammonia as a low-carbon fuel include transportation, wastewater treatment, and steel, cement and aluminium production. In addition to supplying export markets, there will also be opportunities for ADNOC to deliver blue hydrogen to the UAE’s own industrial base.
Investing for the future
With global demand for hydrogen expected to skyrocket as industries come under increased pressure to decarbonise, ADNOC is preparing to scale up its blue ammonia production capacity.
In addition to debottlenecking existing manufacturing facilities, a 1 million-t/y greenfield blue ammonia plant will be built at the new TA’ZIZ industrial cluster in Ruwais. The project is currently in the design phase with start-up slated for 2025. A final investment decision on the scheme will be taken next year. ADNOC also plans to significantly expand its CCUS capacity.
As ADNOC works to establish a blue ammonia supply chain between the UAE and Japan, and invests in expanding its production capacity, other Abu Dhabi entities are simultaneously exploring opportunities in the green hydrogen space.
This twin-pronged approach to developing a hydrogen economy allows Abu Dhabi and the wider UAE to build market demand and achieve big, early decarbonisation wins with blue ammonia, while the challenges associated with manufacturing green hydrogen at scale are studied and overcome.
As the reports recently released by the UN's Intergovernmental Panel on Climate Change show, this is exactly the strategy we need to take: we cannot afford to wait while technology is developed; immediate action is needed to reduce carbon dioxide emissions if we are to limit global warming to 1.5 degrees.
Abu Dhabi’s balanced and coordinated approach to developing a hydrogen economy is the result of the Abu Dhabi Hydrogen Alliance, which was formed in January between ADNOC, Mubadala Investment Company and ADQ Holding Company. The partners pledged to combine their complementary financial strengths and technological and energy expertise to position the emirate as a reliable and secure supplier of green and blue hydrogen/ammonia to international markets, and to accelerate the use of hydrogen in the UAE’s industrial, transportation and utility sectors.
The federal Ministry of Energy & Infrastructure, which is leading the UAE’s drive to reduce its carbon dioxide emissions by 70 per cent by 2050, joined the alliance in March.
Among the green hydrogen projects in the pipeline, Mubadala’s clean energy subsidiary Masdar has teamed up with partners including Siemens Energy, Etihad Airways, Lufthansa and Marubeni to build a hydrogen and sustainable fuel demonstration plant in Abu Dhabi. The photovoltaic solar-power electrolyser facility will showcase the potential for the production of sustainable aviation fuels, clean maritime fuels and green hydrogen for passenger vehicles and buses.
Meanwhile, Abu Dhabi Ports, which is part of the ADQ portfolio of companies, has announced proposals this year for two green ammonia projects at Khalifa Industrial Zone Abu Dhabi. The projects, in partnership with TAQA and Helios Industry, would use industrial-scale photovoltaic solar and electrolyser technology to produce green hydrogen/ammonia for export and to supply ships converted to use ammonia as a bunker fuel.
A natural leader
Abu Dhabi is well placed to become a leader in hydrogen, thanks to some natural competitive advantages. On the green hydrogen side, we are blessed with abundant sunshine and have successfully increased our solar power capacity in recent years with some of the lowest tariff rates ever recorded. While on the blue hydrogen side, ADNOC has one of the lowest carbon intensity footprints among the world’s oil producers.
We have almost zero flaring of associated gases, and our output is dominated by light and medium-grade crudes which are naturally less energy-intensive (and lower cost) to extract.
These carbon and cost advantages combined with our CCUS infrastructure provide a strong foundation from which ADNOC hopes to become a leading player in the emerging hydrogen market and support industrial decarbonisation around the globe, as one of the lowest cost and largest producers of blue hydrogen and its carrier fuels.
Hydrogen offers much promise in addressing the global climate-change challenge. The Hydrogen Council has estimated hydrogen could supply 18 per cent of world energy demand by 2030, reducing annual carbon dioxide emissions by six gigatonnes, while generating $2.5 trillion in revenues and creating 30 million jobs.
But even with today’s unprecedented levels of investment in renewables capacity, green hydrogen is unlikely to be able to keep pace with demand. There will still be a requirement for hydrocarbons-derived energy, particularly in the heavy industrial sectors.
Our investments in blue hydrogen will ensure both ADNOC and Abu Dhabi lead in this energy transition and sit at the centre of a new emerging global market for low-carbon fuels.
Hero image: Oil and gas refinery at twilight
Image 1: ADNOC’s Al-Reyadah plant
Image 2: ISO containers for the transport of ammonia
Image 3: Ruwais Diyab concession
Image 4: Fertiglobe’s Fertil plant in Ruwais
Image 5: Fuel-cell bus at a hydrogen filling station