OCI has signed a memorandum of understanding (MOU) with Lotte Fine Chemical for the supply of low-carbon and green ammonia, which are ideal products to decarbonize the chemical value chain and the power sector, 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 commercialized from 2025 onwards.
The MOU was signed during a visit by the company to Korea as part of a Dutch trade mission to the country led by Liesje Schreinemacher, Minister of Foreign Trade and Development Cooperation of The Netherlands.
With this MOU, OCI will supply Lotte Fine Chemical from OCI existing low carbon ammonia production capacity in Texas starting this year. Lotte Fine Chemical will introduce OCI’s ISCC Plus bio-ammonia, derived from bio-methane, for the first time in Korea, for supply to its domestic customers. When bio-certified, plastic products made of this material will be eligible for tax benefits when exported to Europe.
Future supply is als expected to come from OCI’s new world-class 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 (Africa’s first green hydrogen project), which recently commissioned its first phase. Fertiglobe is a strategic partnership between OCI and Abu Dhabi National Oil Company (ADNOC). OCI, together with Fertiglobe, is one of the largest producers and traders of ammonia and methanol globally.
In the longer term, the shipping industry expects that commercialization of ammonia-powered vessels will start in 2025, and will need to be fueled at major ports. 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 completion of installation of bunkering supply facilities at Ulsan by 2024. OCI 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.
“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.” said Ahmed El-Hoshy, CEO of OCI Global and Fertiglobe.
“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 market by preparing for the upcoming clean hydrogen/ammonia age in advance.” said Kim Yong-seok, CEO of Lotte Fine Chemical.