OCI and Lotte team up for supply of low carbon and green ammonia

OCI Global, a producer and distributor of hydrogen-based products, and Lotte Fine Chemical, an ammonia distributor based in South Korea, have signed a Memorandum of Understanding (MoU) for the supply of low carbon and green ammonia, with first shipments starting this year from OCI’s US facilities.

The companies are also looking to cooperate to build a global supply chain of bunkering for ammonia-powered vessels in Ulsan, Korea, which are expected to be commercialised from 2025 onwards.

Under the MoU, OCI is expected to supply Lotte Fine Chemical from OCI’s existing low-carbon ammonia production capacity in Texas starting this year, and Lotte Fine Chemical is supposed to introduce OCI’s ISCC Plus bio-ammonia, derived from bio-methane, for the supply to its domestic customers.

According to OCI, future supply is also expected to come from OCI’s new large-scale blue ammonia greenfield project under construction in Texas that is expected to be operational in early 2025, as well as from Fertiglobe’s green ammonia production facility in Egypt, which recently commissioned its first phase. To note, Fertiglobe is a strategic partnership between OCI and Abu Dhabi National Oil Company (ADNOC).

OCI pointed out that, in the longer term, the shipping industry expects that the commercialisation of ammonia-powered vessels will start in 2025 and will need to be fueled at major ports. In regard to that, OCI said that Lotte Fine Chemical will explore to leverage its Ulsan port ammonia tank facilities to accelerate the global supply chain for bunkering of ammonia-powered vessels, with the completion of the installation of bunkering supply facilities at Ulsan by 2024. On the other side, OCI unveiled that it plans to set up a global supply chain and bunkering network using its ammonia storage infrastructure located in Rotterdam, the Netherlands, near Suez in Egypt, and in the US Gulf.

Kim Yong-seok, CEO of Lotte Fine Chemical, said: “As part of its clean ammonia supply chain construction project undertaken by Lotte Chemical Unit, we signed the MoU with OCI, a company which has a global competitive edge in terms of ammonia production and global infrastructure, in order to respond to demand increase not only of mixed fuels for conventional power plants but also of ammonia bunkering. We will lead changes in the market by preparing for the upcoming clean hydrogen/ammonia age in advance.”

Ahmed El-Hoshy, CEO of OCI Global and Fertiglobe, commented: “We are pleased to work with Lotte Fine Chemical. Korea is rapidly becoming an important market for clean ammonia in the power and chemicals sectors in particular, and can become an important bunkering hub for clean ammonia in Asia.”

Earlier in March, OCI and Linde, a global industrial gases and engineering company, signed a long-term agreement under which Linde will supply clean hydrogen and nitrogen to OCI’s blue ammonia facility under development in Texas.