Germany awards tender to Fertiglobe for green ammonia from Egypt (updated)

OCI

11/07/2024 16:49

(Updates with contract details, comments from H2Global)
    By Riham Alkousaa
       BERLIN, July 11 (Reuters) - Germany has awarded a tender
to buy at least 259,000 metric tons of green ammonia between
2027 and 2033 to UAE-based Fertiglobe, marking the first in a
round of global tenders to import green hydrogen derivatives
needed for decarbonisation. 
    Europe's biggest economy is seeking to expand the use of
green hydrogen fuel - made from water using solar or wind power
- to cut emissions from industrial sectors that are hard to
electrify, such as steel and chemicals, and reduce dependency on
fossil fuel imports.
    Germany will need to import around 50% to 70% of its green
hydrogen due to limited renewable energy resources needed to
produce it.
    "The import of green hydrogen products is a decisive step in
the ramp-up of the hydrogen market in Germany," Economy Minister
Robert Habeck said in a statement on Thursday.
    Fertiglobe, a UAE-based partnership between Dutch OCI
 OCI.AS  and Abu Dhabi National Oil Co (ADNOC), won the first
tender for green ammonia which is used to make green hydrogen.
It will be produced in Egypt, where 273 megawatts of renewable
energy plants are being built, the ministry said. 
    The bids for the tender, which was first announced in late
2022 and had attracted bids from over 65 countries, were
conducted under the H2Global programme, which Germany introduced
in 2021 to drive the global market ramp-up of green hydrogen and
boost investments. 
    "The successful auction via our H2Global instrument is a
start, and further steps will follow soon," Habeck added.
    Fertiglobe will produce up to 397,000 tons of renewable
ammonia by 2033, beginning with an initial supply of 19,500 tons
in 2027, with a maximum contract value of 397 million euros 
($431 million), Hintco GmbH, the implementing entity of
H2Global, said in a statement.  
    The auction established a contract price of 1,000 euros per
ton, including delivery to Europe, and a net price of 811 euros
per ton, Hintco said.
    "The initial price signals from the pilot auction indicate
substantial potential for achieving more competitive prices in
future rounds," the company said.
    The tender's volume accounts for more than 10% of Germany's
annual ammonia production, the ministry said, adding it was
working on another round of some 3.5 billion euros of green
hydrogen import contracts, including a second 600 million euro
funding round which will be co-financed with the Netherlands.
    ($1 = 0.9214 euros)

 (Reporting by Riham Alkousaa, Editing by Jane Merriman and Mark
Potter)
 ((Riham.Alkousaa@thomsonreuters.com;))