- METI minister visiting Saudi Arabia, Oman for energy security
- Japan, Saudi Arabia undertake world’s first blue ammonia transport
- Middle East ammonia seen competitive against N America, Oceania
Japan signed two sets of cooperation agreements with Saudi Arabia on Dec. 25 in the fields of hydrogen, fuel ammonia and carbon recycling, strengthening the current relationship primarily based on buyer and supplier of crude oil, reports Platts.
Decarbonizing the country’s power generation sector
The cooperation agreements were the latest in Japan’s efforts to develop its large-scale supply chains of hydrogen and fuel ammonia in the Middle East, where it sees great potential in competitive production for decarbonizing the country’s power generation and industries.
The agreements were signed by Japan’s Minister of Economy, Trade and Industry Yasutoshi Nishimura and Saudi Arabia’s energy minister Prince Abdulaziz bin Salman on the sidelines of the first round of the Japan-Saudi Arabia energy dialogue in Riyadh.
The ministerial-level meeting took place following a proposal by the Saudi energy minister to the late Japanese Prime Minister Shinzo Abe during his visit to Saudi Arabia in January 2020 to launch the Japan-Saudi Arabia energy dialogue.
Nishimura on Dec 25 started his whirlwind tour of Saudi Arabia, Oman and Malaysia until Dec. 28, when he has laid out energy security to be among his top agenda. “During a visit to Saudi Arabia and Oman, which are important countries for the energy security, I intend to work on stabilizing global crude oil markets and securing stable LNG supply,” Nishimura told a press conference in Tokyo Dec. 23. “I also intend to seek cooperation in such new areas of hydrogen and ammonia.”
Saudi Arabia accounts for close to 40% of Japan’s crude oil imports as the largest supplier. Under the two memoranda of cooperation, Japan and Saudi Arabia will accelerate the use of hydrogen in transport, promote research and development of hydrogen and fuel ammonia technologies and their use at the local, bilateral, regional and international levels.
The two countries will also explore possibilities of conducting a joint study or pilot project that accelerates the deployment of such technologies as direct air capture, carbon capture, utilization and storage (CCUS)/carbon recycling and low carbon fuels such as e-fuel, gaseous fuels, methane, fuels derived from CO2 and methanol.
The formal ministerial-level cooperation agreements followed efforts at corporate levels, including the world’s first transport of a blue ammonia cargo in 2020 from Saudi Arabia to Japan to be used for power generation, with the CO2 capturing process designated for use in methanol production at SABIC’s Ibn-Sina facility, as well as capturing CO2 used for enhanced oil recovery at Saudi Aramco’s Uthmaniyah field.
In October, the Japan Organization for Metals and Energy Security (Jogmec) signed a memorandum of cooperation with Saudi Aramco on hydrogen and fuel ammonia developments, under which Jogmec will actively consider providing risk money for projects involved with hydrogen and ammonia production in Saudi Arabia.
Japan’s largest refiner ENEOS said in March 2021 that it signed a memorandum of understanding with Aramco to consider development of a CO2-free hydrogen and ammonia supply chain as it accelerates efforts to develop hydrogen production, transport and sales businesses.
Prospective ammonia production appears to be competitive in the Middle East.
A task force set up by METI has estimated that the country’s ammonia CFR price at $335-$339/mt from the Middle East under its estimate released in September, compared with $413/mt from North America and $429/mt from Oceania as the main basis for developing its supply chain by 2030.
The task force comprising major Japanese importers, trading houses, a think tank and state-owned financial institutions looked at the Middle East, North America and Oceania as potential long-term contractual suppliers of ammonia as the power generation fuel.
Their analysis assumed Japan uses 20% co-firing of ammonia for coal-fired power generation, introduces 3 million mt/year of ammonia domestic demand and targets ammonia supply costs of high Yen 10s normal cubic meters-H2 at 2030.
It used natural gas as feedstock for a 1 million mt/year ammonia plant at each of four locations including two in the Middle East and one each in North America and Oceania.
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