Ammonia
Overview
The ammonia market is undergoing a period of rapid and dramatic change. Conventional or ‘grey’ ammonia is traditionally produced almost exclusively for its nitrogen content. However, the urgent need to decarbonise the global economy and meet ambitious zero-carbon goals has opened up exciting new opportunities.
Ammonia has the potential to be the most cost-effective and practical ‘zero-carbon’ energy carrier in the form of hydrogen to the energy and fuels sectors. This has led to rapid growth of interest in clean ammonia and a flurry of new ‘green’ and ‘blue’ ammonia projects.
Argus has many decades of experience covering the ammonia market. We incorporate our multi-commodity market expertise in energy, marine fuels, the transition to net zero and hydrogen to provide existing market participants and new entrants with the full market narrative.
Our industry-leading price assessments, powerful data, vital analysis and robust outlooks will support you through:
- Ammonia price assessments (daily and weekly), some of which are basis for Argus ammonia futures contracts, Ammonia forward curve data and clean ammonia cost assessments and modelled weekly prices
- Short and medium to long-term forecasting, modelling and analysis of conventional and clean ammonia prices, supply, demand, trade and projects
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Latest ammonia news
Browse the latest market moving news on the global ammonia industry.
CBAM to drive low-carbon NH3 market: Woodside Q&A
CBAM to drive low-carbon NH3 market: Woodside Q&A
London, 16 December (Argus) — Ahead of the Argus Clean Ammonia Conference Europe in Rotterdam this month, Argus spoke to Rick Beuttel, vice president for new energy at Australia's Woodside Energy, about its recently acquired carbon capture and storage (CCS) ammonia production project in the US Gulf. Edited highlights follow. Tell me about Woodside Energy and how you ended up buying OCI's 1.1mn t CCS ammonia project in Beaumont, Texas? Woodside is a global energy company founded in Australia, providing reliable and affordable energy across the world. Our global portfolio includes LNG, oil and gas assets across Australia, the Gulf of Mexico, the Caribbean, Senegal, Timor-Leste and Canada. Our capital allocation framework also includes target investment criteria for new energy opportunities as we work towards creating a diversified and flexible portfolio that can respond to changes in demand and supply for our products. With respect to the Beaumont Clean Ammonia project, our acquisition positions Woodside to be an early mover in the lower carbon ammonia industry and meet growing customer demand globally. It supports our strategy to thrive through the energy transition with a low-cost, lower carbon, profitable, resilient and diversified portfolio. How is the Beaumont plant progressing? Is it still on track to start producing in 2025, with CCS operational from 2026? Woodside continues to target first ammonia production from 2025 for phase 1. Lower carbon ammonia production is targeted for 2026, following commencement of CCS operations to be provided to Linde by ExxonMobil. How is the regulatory market shaping up in Europe and what affect does this have on you as a producer? We believe that Europe's carbon border adjustment mechanism (CBAM) is going to be the driving force that pushes consumers of ammonia or hydrogen to adopt lower carbon molecules from 2026 onwards as a way to remain compliant and reduce costs. But Europe is not the only end market. There are tenders for lower carbon ammonia in Asia, and the OCI team and now Woodside have been active in pursuing those opportunities. In Asia, buyers prefer long-term contracts. European opportunities follow more closely the traditional ammonia market, whether for fertilizer or as a chemical feedstock, and are shorter term contract durations. Beaumont gives us the opportunity to have a balanced portfolio, both geographically and from a contract perspective. How achievable are premiums for low-carbon ammonia in the current market and do you expect CBAM implementation will aid this? For Woodside, phase 1 of the project exceeds our capital allocation targets. And we'd love a huge premium on day one. But you have to be pragmatic. While there is a great deal of climate sensitivity, people are running businesses and cost is a concern. In our view the return on investment is there and the premium will increase as the CBAM percentage increases. You also have to consider the underlying cycle of the ammonia market, global events, Europe's position with respect to gas supply and the efficiency or competitiveness of existing ammonia assets. All of these will likely cast as long a shadow as CBAM, particularly in the early years. The Woodside project adds 1.1mn t to the market in 2026. Do you see enough demand from new cases to consume the additional supply? There is also another project in Texas City, which will come on line soon. Of course, these two new assets coming on stream will have an impact. But if we look at the underlying competitiveness of the Gulf Coast, with low-cost gas and these new, large scale, very efficient assets, we believe they will compete. But we are not going to be running the facility at full rates from day one and we are more looking forward to trading the lower carbon ammonia. Some of that will go to Europe and some to Asia. Speaking of which, have you participated in either the Japanese or Korean tenders? We are looking at all markets where there is lower carbon ammonia activity, whether that is power generation, bunkering or other markets. Looking at power generation markets in Asia, Woodside has long-standing relationships with many of the countries from an LNG perspective. Making lower carbon ammonia from natural gas and shipping it around the world is very much analogous to shipping LNG. By Lizzy Lancaster Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Ice AOA ammonia contract volumes pass 26,500t
Ice AOA ammonia contract volumes pass 26,500t
London, 11 December (Argus) — The Ice Ammonia Outright — Argus Ammonia (AOA) northwest Europe cfr future contract has surpassed 25,000t traded, reaching 26,500t on 9 December. The Ice AOA futures contract was launched on 16 January 2023 and settles against a calendar-month average of the daily Argus northwest Europe cfr duty free price. The contract's block trade minimum threshold is five lots. One lot is the equivalent of 100t. Since the contract launched, all trades have gone through FIS brokers and cleared through Ice. "Ammonia's role in the energy transition highlights its potential as a cornerstone of low-carbon energy solutions, and we are optimistic about the bright future for this product," FIS ammonia and fertilizer broker Kieran Walsh said. Ammonia is gaining traction as a potential method of decarbonising energy sectors, by producing it using renewable energy sources or through carbon capture and storage techniques. It can potentially be used directly as a fuel source in the marine sector, for co-firing in power generation or as a hydrogen carrier. More than 3mn t of physical ammonia has been imported into northwest Europe so far in 2024, according to Argus line-up data . Europe as a whole accounts for about a fifth of global ammonia imports, or about 4mn-5mn t/yr. By Ruth Sharpe Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Q&A: Oman OQ’s fourth IPO draws firm investor interest
Q&A: Oman OQ’s fourth IPO draws firm investor interest
Muscat, 6 December (Argus) — Oman's state-owned OQ raised 188mn Omani riyals ($489mn) from its fourth initial public offering (IPO) this year with a "good mix of both international and local investors" flocking to the company's chemical and LPG subsidiary, OQ Base Industries (OQBI). OQBI's chief executive Khalid Al Asmi spoke to Argus at the Gulf Petrochemicals and Chemicals Association forum in Muscat about the company's expansion plans and its emission reduction targets. Shares in OQBI are expected to begin trading on the Muscat Stock Exchange on 15 December. OQBI has seen strong interest from some of the largest investors in Oman. How would you evaluate the investor interest so far? If we look into the overall average of the offering, the IPO price was 2.1 times oversubscribed by both retail and institutional investors, Looking at the trend of investors, it was a good mix of both international and local investors. The fact that the investors believed in our story by buying off our shares implies the trust that they have on our company and on our future plans. Are there any capacity expansion plans or new any projects in the pipeline for next year? We do not have any projects in line for next year. However, we have non-committed projects that are awaiting FID and other approvals from the shareholders. We are looking at a brownfield expansion project to increase our current methanol plant capacity by 50pc to 550,000 t/yr. In it, we are also exploring technologies for decarbonisation and carbon capture. Our aim is to get this project up and running by 2028. We have done an initial study and it was concluded that the project is valuable. How would you view the long-term outlook for petrochemical markets? The market segments that we are operating — methanol, ammonia and LPG— are all expected to grow in the future. Ammonia has already started penetrating into the marines [sector], same with methanol. LPG will grow to around 39mn t/yr by 2030. So the market is still hungry for our products. That will support the prices, which would either go up or go in line with the GDP. Looking forward, we are not worried about the markets, based on the available information that we have. How does OQBI's strategy fit into Oman's clean energy transition plans? We have both short-term and long-term targets for carbon emission reductions. For the near term, we expect to reduce our carbon footprint by 25pc by 2030 from our base target that was set in 2023. So far, we have reduced our energy intensity by 0.3mn Btu/t produced and now we are targeting 1.1mn Btu in 2025. By 2030, it would be a 25pc reduction. There is growing interest in green ammonia and blue methanol, how is OQBI positioned to capitalise on the interest? We are very well-positioned to capitalise on the shift. We have an ambitious growth target for both blue methanol and green ammonia for 2030 and beyond. That is in line with the net zero target that was set by the government of Oman. We currently have plans to start the transit but that will only happen when the right time comes. When the 365,000 t/yr ammonia plant was built, we took into consideration the need to achieve zero Scope 1 emissions. So the transition from ammonia to green is doable. When it comes to methanol, we will always rely on gas, so green methanol is not an option. But when the time comes, it can also be converted into blue methanol. How is methanol demand looking in the markets you are targeting? When we are referring to the market we are supplying to, we don't deal with the market directly. We are leveraging on the outreach of OQ Trading, which is considered one of the top five methanol traders globally. OQ Trading has a global reach from markets in Asia to Europe and even the Americas. The market is always dynamic and we will always target the market that gives us the highest netback. Currently, Asia is more profitable but tomorrow it could be somewhere else. By Rithika Krishna Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
ExxonMobil slams EU renewable H2 mandates
ExxonMobil slams EU renewable H2 mandates
Rotterdam, 27 November (Argus) — EU mandates for renewable hydrogen use by 2030 are jeopardising the bloc's industrial competitiveness and the Netherlands' plans for implementing the rules are "really problematic", according to ExxonMobil. EU rules are "essentially not helpful" as they suffer from design issues and further threaten the bloc's industrial competitiveness, ExxonMobil Low-Carbon Solutions' policy manager Bert de Backker told the Argus Clean Ammonia Europe Conference in Rotterdam today. Under the EU's revised renewable energy directive (RED III), member states must ensure that 42pc of their industrial hydrogen use is renewable by 2030 and meet a 1pc quota for use of renewable hydrogen or derivatives in transport by then. Some industry participants might view this as helpful for driving ahead renewable hydrogen uptake and production, de Backker said. But the rules were developed based on "wrong" cost assumptions for renewable hydrogen and are set to disadvantage European producers compared with imports, he said. Industries that are subject to the mandate will struggle because the rules do not apply to imported products such as steel and chemicals, he said. The focus on renewable hydrogen only means the mandates are a "technology bias policy," according to de Backker. In addition, placing the same obligations on each country ignores the geographical diversity across Europe where hydrogen use varies considerably between member states and some regions have much more favourable conditions for renewable hydrogen production than others, de Backker said. The EU Emissions Trading System (ETS) and the carbon-border adjustment mechanism (CBAM) already provide a big incentive to switch to clean hydrogen use, he said. Member states have until 21 May 2025 to transpose the EU rules into national laws and specify how they intend to meet the mandates. But many member states are hesitant to transpose the rules, de Backker said. Industry participants at last week's European Hydrogen Week suggested that several member states could miss the May 2025 deadline . This creates a lot of uncertainty and diverging implementation in different countries does not help the idea of a single market, de Backker said. If "one or two" member states fail to implement the rules, the European Commission might launch an infringement procedure against them, de Backker said. But if the majority of countries do not follow the legislation, the commission is unlikely to do this, he said. Pioneer problems The Netherlands recently took on something of a pioneering role by laying out its plans in a draft law that was put forward for consultation. The government is planning to introduce obligations for individual companies from 2026 . It has yet to decide the level of the mandates, but is contemplating either 8pc or 24pc by 2030, partly depending on how EU peers are planning to reach the countrywide obligations. The mandate plans are "really problematic" and jeopardise the competitiveness of Dutch industry, de Backker said. Studies commissioned by the government for the lawmaking process pointed to the potential threat to industry, but while the government acknowledged this, it is still planning to go ahead with the obligations, he said. ExxonMobil plans to reduce carbon emissions from its Dutch hydrogen production by capturing and sequestering CO2. This is an example of "real-life abatement" and could cut emissions by 60pc, de Backker said. "But now the government comes and tells us we still have to use green hydrogen," he said. The focus should be on how emissions can best be abated and industry should decide what the best tools are for this, de Backker said. The Dutch government is planning to exempt some of the country's ammonia production from the mandates, noting that the sector is at particular risk if forced to comply with higher obligations. The EU rules potentially provide some leeway for this, although the commission has not made clear exactly under which circumstances exemptions are possible — an approach which has led to confusion in the industry . The commission has said in workshops that it will not clarify this further for now, de Backker said. It would only let member states know retroactively by the early 2030s whether their implementation of these specific rules for ammonia is appropriate. This is "a very strange situation" and "clearly the result of a messy political compromise", de Backker said. By Stefan Krumpelmann Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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