(Oslo / Norway) – Large infrastructure projects rely on the transport of hydrogen in the form of ammonia – according to Rystad Energy, “a safer and more cost-effective method for exporting hydrogen in large quantities”. According to the forecasts, at least 174 export terminals focus primarily on the conversion of hydrogen into ammonia, which accounts for 62 percent of the total export volume and around 13,5 million tons per year (million tpa). By 2035, the traded ammonia volume is expected to reach 76 million tons, four times the transport and trading volume in 2020.
Global pipeline for green hydrogen projects. © Rystad Energy Hydrogen Solution (White Paper)
Green hydrogen, which is produced using renewable energies, is the cleanest but currently most expensive form of producing the energy source. While blue hydrogen from natural gas is more cost-effective, it is widely viewed as a transition fuel "until affordable and reliable alternatives become more widely available," the energy research firm said in a white paper.
Status of individual countries' plans to develop hydrogen strategies. © Rystad Energy Hydrogen Solution (White Paper)
Liquefied natural gas (LNG) is already widely used for transportation and power generation, and its infrastructure could also be adapted to transport hydrogen. This could be “a good solution” because, given the booming ammonia trade, there is “an urgent need to fully exploit the potential of existing plants,” said Minh Khoi Le, head of hydrogen research at Rystad Energy.
Streams from America, Africa and Australia
There are currently 220 ammonia infrastructure projects worldwide with a total handling capacity of more than six million tons. Australia, which is aiming to become a top exporter of clean ammonia, currently has only seven terminals with a total storage capacity of about 173.000 tonnes. “Without a significant expansion by 2040, this could only handle two to three days of planned clean ammonia exports.” According to the Rystad estimates, global exports of clean ammonia will rise to 2050 million tpa by 121, of which Africa will have 40,7 million tpa and Australia contributed 35,9 million.
Selected projects for the production of hydrogen: financing and start of construction in 2023. © Rystad Energy Hydrogen Solution (white paper)
In order to cope with Australia's expected monthly ammonia exports, terminal capacity there would have to be increased tenfold. Projects such as the Western Green Hydrogen Hub and the Australia Renewable Energy Hub were among the largest hydrogen projects in the world to consider ammonia as a transport medium.
Both the private and public sectors supported the development of a global hydrogen economy, with major companies signing deals with ammonia producers and governments auctioning off import contracts. For example, the Japanese energy trader JERA, founded in 2015 as a joint venture between Tepco Fuel & Power and Chubu Electric Power, launched a tender to secure up to 2027 tons of ammonia annually from 500.000. According to Rystad, negotiations are currently underway with manufacturers such as CF Industries and Yara. In Germany, the energy companies Eon, Uniper and RWE have concluded declarations of intent on ammonia with international companies such as Everwind (Canada), Greenko (India) and Hyphen (Namibia).
Great demand from the shipping industry
Currently, however, only 30 percent of the global liquid gas fleet can transport ammonia, and only 50 of the large gas tankers are even capable of doing so. To meet the increasing demand, Singapore-based Eastern Pacific Shipping Pte. Ltd. ordered four large ammonia tankers (VLAC, Very Large Ammonia Carrier) from the Chinese Jiangnan Shipbuilding Group. With a capacity of 93.000 cubic meters each, these are the largest freighters in the world. “The ammonia shipping industry is still in its early stages but is growing rapidly,” said Rystad. However, around 121 VLAC would be needed to transport the announced 200 million tons of ammonia. Investment volume: 20 billion dollars.
In addition to the new buildings, Rystad says there is also growing interest in converting LPG ships for ammonia transport. There are currently over 1.450 such tankers available. Converting these ships to run on ammonia would provide “a solid transition strategy for shipowners,” especially as demand for LPG “is expected to decline” as decarbonization efforts continue, the paper says.
Rystad Energy, Whitepaper: “The global markets for Hydrogen and CCUS. Where are the challenges and opportunities?” Free as PDF (20 pages, Registration necessary).
Photos
There are currently too few ammonia tankers for the transport capacity expected by Rystad. Only 30 percent of the world's existing liquid gas fleet can transport ammonia. © Ammonia Energy Association
