Australia emerging as global leader in clean ammonia market
While there are numerous headlines about Australia’s potential to become a leading international supplier of hydrogen, a number of local companies are quietly placing the nation at the forefront of the “clean” ammonia market.
Clean ammonia, which doesn’t emit carbon dioxide when burned, is expected to become a next-generation fuel as it contains properties ideally suited for the hydrogen economy.
The energy fuel is particularly favoured by Asian nations such as Japan, as it is considered easier to transport and store than hydrogen.
Major new fuel
Australia’s leading energy company Woodside Energy (ASX: WDS) has certainly recognised the fuel’s potential, recently completing the 100% acquisition of OCI Clean Ammonia and its lower-carbon ammonia project in Texas.
Woodside chief executive officer Meg O’Neill said the transaction positioned Woodside as an early mover in the growing lower-carbon ammonia market.
“Global ammonia demand is forecast to double by 2050, with lower-carbon ammonia making up nearly two-thirds of total demand,” Ms O’Neill said.
“Evolving decarbonisation policies have potential to attract a premium price for lower-carbon ammonia.”
NH3-Chevron discussions
NH3 Clean Energy (ASX: NH3) recently achieved a major milestone in its plans to become a supplier of clean ammonia to Asian buyers with the start of official discussions with global energy giant Chevron.
One of the largest gas reserve owners in Australia, Chevron has signed an indication for the supply of pipeline-quality gas to NH3’s proposed WAH2 clean ammonia project in Western Australia.
NH3 (formerly Hexagon Energy Materials) has added further momentum to the Chevron discussions with the successful completion of a $725,000 equity placement.
The placement strengthens the company’s balance sheet as it nears completion of preliminary front-end engineering and design (FEED) and seeks to finalise the remaining commercial agreements required to support entry into FEED.
Sprintex testing
Sprintex (ASX: SIX) is another local firm making its mark in the ammonia space with the successful completion of hot environment testing under a $1 million phase one evaluation contract with Mest Water.
Mest Water’s technology addresses the critical need for efficient ammonia emission reduction in livestock farming, particularly in countries with stringent environmental regulations.
With a phase one evaluation contract signed and phase one testing underway, the collaboration is set to revolutionise the industry by providing a solution that meets both efficiency and regulatory requirements.
WA energy hub
In a recent interview with S&P Global, unlisted InterContinental Energy said it is aiming to lower the cost of renewable ammonia to around $1,000 a tonne at its 50-gigawatt Western Green Energy Hub (WGEH) project in WA.
Considered the country’s largest renewable hydrogen/ammonia project, WGEH is the recipient of significant support from the Australian government.
The project’s Phase 1 is expected to reach a final investment decision in 2029, with a commercial operation date anticipated around 2034.
Australian potential
According to the Minerals Council of Australia (MCA), Australia can be a leader in clean ammonia, a product that shares hydrogen’s game-changing potential in the global task to deliver net-zero emissions by 2050.
With substantial carbon capture, utilisation and storage sites in Victoria and Queensland, along with competitive and accessible coal reserves, natural gas and significant renewable energy generation capacity, the MCA believes Australia is well placed to meet growing international and domestic demand for this important fuel.
The local industry is working with Japan to deliver long-term supplies of clean hydrogen and ammonia, such as utilising gasified brown coal through the Hydrogen Energy Supply Chain project in Victoria.