RWE and AM Green ink long-term ammonia supply deal

German RWE Supply & Trading has signed a memorandum of understanding (MoU) with AM Green Ammonia (AMG), a subsidiary of the Indian AM Green Group, for the long-term supply of green ammonia from the latter’s production sites in Kakinada and Tuticorin.

The deal outlines the supply of up to 250,000 tonnes of green ammonia per year. Initially, 50,000 tonnes of green ammonia will be produced at the Kakinada site, with the remaining volume of up to 200,000 tonnes to be sourced from the Tuticorin facility.

According to RWE, AMG’s ammonia manufacturing facilities will be powered entirely by carbon-free energy sources such as solar, wind and hydroelectric power, and the produced ammonia will meet EU standards for Renewable Fuels of Non-Biological Origin (RFNBO) as defined in the Renewable Energy Directive (RED III). AMG’s facility in Kakinada has already been pre-certified for RFNBO compliance. Pre-certification for other facilities is underway.

Deliveries of green ammonia from AMG’s sites are expected to start by 2027, RWE revealed, noting that a subsequent offtake agreement between the two parties will detail the contractual provisions.

Costas Papamantellos, Head of International Hydrogen Investments at RWE Supply & Trading, commented: ”RWE is committed to investing in hydrogen and its low-carbon derivatives to help industries achieve their climate goals. For this end, we are building strong supply chains with partners globally. Partnering with AMG allows us to secure green ammonia capacities at an early stage.”

Mahesh Kolli, Group President of AM Green, stated: “We are delighted to partner with RWE to propel the transformation of various industries and several OECD economies. This agreement emphasizes AM Green’s ability to align itself with an innovative and flexible contracting structure in line with commodity trading practices.”

To remind, in 2024, Yara Clean Ammonia, a subsidiary of Norway-based Yara International, also signed an ammonia supply deal with AM Green. The term sheet and the subsequent offtake agreement specifically cover the long-term supply of up to 50% of renewable ammonia from Phase 1 of AM Green’s ammonia production facility in Kakinada.