The Abu Dhabi National Oil Company (Adnoc) said on Monday that this will build a world-scale “blue” ammonia manufacturing facility in Ruwais, Abu Dhabi, in the UAE.

Adnoc is an early leader in the burgeoning hydrogen sector, pushing the UAE's leadership in developing local and international hydrogen value chains while also contributing to the UAE's economic growth and diversification.

The factory that is in the designing phase will be built within the new TA'ZIZ industrial environment and chemicals centre in Ruwais.

Blue ammonia is created by combining nitrogen and “blue” hydrogen obtained from natural gas raw materials, with the carbon dioxide byproduct of hydrogen synthesis recovered and stored. Ammonia may be utilized as a low-carbon fuel in a variety of industrial applications, notably transportation, energy production, and steel, cement, and fertilizer manufacturing. The plant will have a capacity of 1,000 kilotons per year.

Adnoc has struck a series of contracts in recent months to investigate hydrogen supply options with clients in important demand areas, including Japan's Ministry of Economy, Trade, and Industry and Korea's GS Energy. This expands on the Supreme Petroleum Council's directive to Adnoc in November 2020 to investigate prospects in hydrogen and hydrogen transporter fuels such as blue ammonia, to position the UAE as a hydrogen leader. Adnoc has become a large producer of hydrogen and ammonia, with the Ruwais Industrial Complex producing over 300,000 tonnes of hydrogen per year.

“It's an important milestone in the growth of our blue hydrogen and ammonia business, expanding on the UAE's solid position as a producer of competitive, low carbon natural gas and our leading role in carbon capture and underground storage,” said Dr. Sultan Bin Ahmed Al Jaber, Minister of Industry and Advanced Technology and Adnoc Managing Director and Group CEO. As we traverse the global energy transformation, we think hydrogen and its carrier fuels, like ammonia, hold promise as zero-carbon energy sources.

“The growth also indicates that only the TA'ZIZ industrial ecosystem is advancing rapidly in Ruwais. With TA'ZIZ as a vital catalyst, we are well-positioned to further reinforce our position as a premier destination for domestic and international investment, while using technology to expand the UAE's highly advanced manufacturing and industrial base."

The initiative will capitalize on the UAE's position as a significant producer and holder of natural gas reserves, and its leadership in Carbon Capture, Utilization, and Storage (CCUS). The employment of modern technology to keep CO2 from entering the environment after it's been dissipated as a byproduct of industrial activities is referred to as CCUS. Adnoc now runs Al Reyadah, the world's first fully commercial CO2 factory for the iron and steel sector, and the Middle East's first commercial-scale carbon capture, utilization, and storage plant. Al Reyadah collects up to 800,000 tonnes of CO2 from local UAE steel manufacturing each year.

Wood has been awarded design agreements for such initial Front-End Engineering and Design (Pre-FEED) development on the ammonia plant and six more TA'ZIZ chemicals projects. In the meanwhile, Adnoc will conduct a feasibility assessment on providing blue hydrogen to a project from its Ruwais facilities. The project's final investment plan is scheduled for 2022, with a start-up date of 2025.

TA'ZIZ had made huge progress since its inception in November 2020. Land and maritime studies have already been done as part of the site's development. Domestic and international investors have expressed strong interest in prospects throughout the whole ecosystem and value chain, and contracts with the first round of investors are getting near completion.

Adnoc has approved a $318 million (Dhs1.16 billion) investment to link freshly drilled smart wells to the primary production facilities at Bu Hasa, maintaining production capability of 650,000 barrels per day (bpd) at Adnoc's largest onshore asset.

Adnoc's subsidiary, Adnoc Onshore, has awarded the engineering, procurement, and construction (EPC) deal in two packages. Package 1 was given to China Petroleum Pipeline Engineering Co. Ltd for up to $158.6 million (Dhs582 million), while Package 2 was given to Robt Stone (ME) LLC for up to $159.1 million (Dhs583.9 million). The deals are for three years with the option of a two-year extension. The EPC award was made following a competitive bidding procedure, and over 50% of the total value of both awards would be returned to the UAE economy through Adnoc's In-Country Value (ICV) initiative, demonstrating how Adnoc continues to emphasize ICV as it implements its 2030 vision.