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Mitsui to build $900m ‘blue ammonia’ plant in Australia

  • October 1, 2021
  • , Nikkei Asia , 6:38 p.m.
  • English Press

TOKYO — Japanese trading house Mitsui & Co. will start producing environmentally friendly ammonia fuel, Nikkei has learned.

 

Mitsui plans to invest more than 100 billion yen ($899 million) to build a production plant for so-called “blue ammonia,” which does not emit carbon dioxide when burned. The plant, which is to go up in Western Australia, will have the capacity to ship 1 million tons of the fuel to Japan annually.

 

CO2 generated during production is to be stored in a waste gas field near the factory.

 

The move is expected to help the Japanese government meet its target of procuring 3 million tons of ammonia fuel in 2030. Mitsui peers Mitsubishi Corp. and Itochu have already decided to produce an annual 1 million tons of ammonia for fuel in Canada. Mitsubishi also has production plans in the U.S. in the second half of this decade.

 

Mitsui & Co. will build the plant near a gas field in which it holds a 50% stake. It will use gas from that field to produce ammonia, which will be exported to Japan and supplied to domestic electric power companies in 2028.

Mitsui & Co. will install compressors in its waste gas field near the factory. CO2 emitted during production will be compressed and stored in a waste gas field.

 

It will collaborate with Wesfarmers, an Australian conglomerate that already operates an ammonia plant in Western Australia, for production. In addition, it will collaborate with the Japan Oil, Gas and Metals National Corporation on CO2 storage. Memorandums of understanding have been signed with both companies.

 

Ammonia does not emit CO2 when burned. It can also be used in coal-fired power plants by mixing it with coal to reduce emissions.

 

Ammonia is produced by stripping away hydrogen from natural gas and combining it with nitrogen. When it is produced by solar and other forms of electric power generation that do not emit CO2, it is called “green ammonia.”

To be blue ammonia, any CO2 emitted throughout the process has to be captured and stored, like in Mitsui & Co.’s project.

 

Itochu and Mitsubishi have partnered with Malaysia’s state-owned oil giant Petronas and the U.K.’s Royal Dutch Shell to produce blue ammonia in Canada. Both companies will ask other companies to collect and store CO2.

Mitsui will be the first Japanese company to handle everything from the production of natural gas to the production of ammonia, and finally to the recovery and storage of CO2.

 

According to estimates, the cost of generating electricity with ammonia fuel is 23.5 yen (21 cents) per kilowatt-hour, which is about a quarter the price of hydrogen.

 

Nearly 90% of the world’s 200 million tons in annual ammonia production is processed and consumed as fertilizer. Manufacturing and tanker transportation technologies have already been established for the fuel, but there is a bottleneck when it comes to securing large enough quantities for energy applications.

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