Japan, Russia look at creating blue ammonia value chain

Market: Crude oil, Electricity, Emissions, Fertilizers, Hydrogen, Natural gas
28/12/20

Japanese firms, backed by state-owned energy agency Jogmec, plan to study the possibility of producing and shipping blue ammonia produced in Russia's Siberia for co-firing at coal-fired power generation plants in Japan.

Jogmec, Japanese trader Itochu and plant engineering firm Toyo Engineering have agreed with Russian oil producer Irkutsk Oil (IOC) to conduct a joint feasibility study on the development of a blue ammonia value chain. Itochu and Toyo Engineering will be initially commissioned to study the feasibility of producing ammonia from hydrogen produced by IOC in eastern Siberia and transporting it from Russia to Japan.

The partners are considering studying the establishment of an entire value chain for mass-produced blue ammonia using natural gas produced by IOC to ensure stable supplies to Japan as the next step. Carbon dioxide (CO2) generated and captured from the ammonia production process is planned to be injected into eastern Siberian oil fields for enhanced oil recovery.

The co-operation enables the four parties to bring together technologies and expertise to reduce greenhouse gas (GHG) emissions and cope with global warming. Jogmec and Itochu have partnered with IOC at the Ichyodinskoye oil field in eastern Siberia.

Itochu said it is aiming to establish efficient production and transportation of blue ammonia and to achieve stable supplies to the Japanese market. The trader is also participating in projects to develop supply infrastructure to use ammonia as a marine fuel in Japan and Singapore.

The project can provide a new option to boost Japan and Russia's energy security through establishing a fuel value chain, Toyo Engineering said. The firm has been in business with Russia for more than 50 years and has participated in about 80 ammonia plant construction projects, as well as consulting, engineering and construction of oil and gas production facilities and enhanced oil recovery units.

Jogmec now has a strategy to reinforce its technology and financial support for carbon, capture and storage (CCS) projects as part of Tokyo's commitment to achieve a decarbonised society by 2050. It is also seeking to explore ammonia business opportunities with domestic and overseas firms to create hydrocarbon opportunities.

The government of premier Yoshihide Suga is targeting to boost Japan's use of hydrogen and ammonia as part of a 2050 climate goal to achieve net-zero greenhouse gas emissions.

Japan imported the world's first shipment of blue ammonia from Saudi Arabia earlier this year under a joint project between state-controlled Saudi Aramco, its petrochemicals affiliate Sabic and Japanese energy think-tank IEEJ.

By Rieko Suda

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London, 2 January (Argus) — Liquid sulphur in Northwest Europe is expected to remain short in 2025, with production limited by lower output from refineries, and demand outstripping supply. Sulphur supply curbed In the past two years sulphur output from European refineries has dropped as a result of poor refining margins and competition from imports from new mega-refineries out of region. Additionally, sanctions on Russian crude oil imports to European refineries have turned the crude slate in the region sweeter. In 2024 refinery maintenance and unexpected outages resulted in lower production of molten sulphur. These were overdue following healthy refining margins in 2023 leading refineries to run at high rates and postponing maintenance, as well as earlier pandemic restrictions also limiting maintenance. Further European refining capacity is at risk in 2025, as Petroineos' Grangemouth refinery in Scotland is expected to be converted to an import terminal, while in Germany, Shell will cease crude processing at its 80,000 t/yr Wesseling refinery. Additionally, BP has indicated plans to permanently shut down a crude unit and a middle distillate desulphurisation unit at its 210,000 t/yr Gelsenkirchen plant. Refineries could still delay some of these closures, provided that refining margins were supportive of this. Sulphur consumption is higher though risks remain Sulphur consumers were running at low rates in Europe over 2023 due to low demand and poor economics as well as high energy prices. By 2024 sulphur demand lifted, and many consumers were unable to source the larger quantity of sulphur. The shortfall of molten sulphur bolstered quarterly contract prices during 2024; in the first quarter prices stood at $103.5-119.5/t cfr, rising 49pc on a mid-point basis to reach $158.5-174.5/t cfr in the fourth quarter. Contract negotiations for the first quarter of 2025 started against a backdrop of a short market and firmer global prices weighed against competitiveness of the region's chemical industry, with consumers seeking a rollover or a smaller increase of $10-15/t cfr against suppliers pushing for a larger $25-30/t rise. In 2025 liquid sulphur is expected to continue to be short in the region, with regular liquid imports. Discussions for an additional sulphur tanker are also expected to lead to more imported product entering the region by the second half of 2025. Yara's sulphur remelter in Finland is expected to start in April 2025, but will have limited impact on the industrial cluster in the Benelux and German regions. Additionally, at least one new commercial sulphur burner is expected in Germany for a 2027 start to operations, with the Mitsui subsidiary Aglobis announcing preliminary agreements with port and logistics operators in Germany's Duisburg area. Sulphuric acid implications The shortage in liquid sulphur has resulted in a new reality sulphuric acid in Northwest Europe, resulting in a wider differential between sulphur-burnt and smelter-based acid, of up to €80/t, on the quarterly contracts. The acid contracts for the first quarter of 2025 are not fully settled, the sulphur burnt contract was heard at a further increase of €15 added to the sulphur Benelux settlement, while an increase of around €10/t was heard for smelter-based acid. Some sulphur-burners have been forced to shut down in the Benelux region, mainly due lack of liquid sulphur. Additionally, there is the risk that some end used may be pushed out of the market due to the increased cost of sourcing sulphur burnt acid. And while some demand may continue to shift to smelter-based acid, not all sulphur burners or downstream industries can easily replace liquid sulphur as a feedstock due to purity or economic implications. By Jasmine Antunes, Maria Mosquera and Lili Minton Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Q&A: EU biomethane internal market challenged

02/01/25

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02/01/25

Q&A: EU biomethane internal market challenged

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02/01/25

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02/01/25

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02/01/25

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