On Tuesday, the Abu Dhabi-based energy company, Adnoc announced the completion of its acquisition of Netherlands-based OCI Global stake in Fertiglobe, increasing its share in the company to 86.2 percent.
Fertiglobe wants to increase the long-term sales contract for low-carbon ammonia after Adnoc acquired most of the shares in the company, says its CEO.
The move will help fasten the exports of ammonia. The carbon dioxide emitted during the production of ammonia is stored underground.
When Fertiglobe is integrated with Adnoc, the ability to sell to end users for long-term, durable contacts will increase.
The Netherlands-based OCI Global holding in Fertiglobe has been fully acquired by the Abu Dhabi-based energy business, raising its ownership interest to 86.2 percent.
On Tuesday, the Abu Dhabi-based energy company, Adnoc announced the completion of its acquisition of Netherlands-based OCI Global stake in Fertiglobe, increasing its share in the company to 86.2 percent.
They signed a legally binding contract in December for Adnoc to pay $3.62 billion to acquire the whole share of OCI in Fertiglobe, and Adnoc will pay the business the entire cost of all upcoming and ongoing low-carbon ammonia projects, including two in Abu Dhabi.
Adu Dhabi plants will add more than two million tonnes per year (mtpa), doubling the ammonia capacity to 1.6 mtpa and raising its sellable capacity to 8.6 mtpa.
According to Adnoc, Fertiglobe is the largest seaborne exporter of urea and ammonia globally. It has a 10 per cent share of the global market. Growing businesses to manufacture low-carbon ammonia will help stabilize its profits.
The price of nitrogen fertilizer has been highly volatile in the past few years, mainly because of supply chain interruptions brought on by the COVID-19 pandemic, the Russia-Ukraine war, and other factors.
In the long run, low-carbon ammonia will make up most of the ammonia output, with the fuel production predicted to double or even triple, according to Mr El Hoshy.
This year, the company won the first pilot auction for renewable ammonia held by Germany-based H2Global. Fertiglobe will produce 397,000 tonnes of renewable ammonia by 2033, with an initial output of 19,500 tonnes in 2027.
Every extra tonne in upcoming projects transferred after the acquisition will have low carbon with a content of 50 per cent less than that of a standard grey ammonia tonne.
At the moment, the company produces grey ammonia, which is used for chemicals and fertilizers, but the carbon dioxide emitted from it is released but not collected.
As the EU implements the Carbon Border Adjustment Mechanism (CBAM) in 2026, the UAE is transitioning to cleaner ammonia forms.
CBAM, which protects the EU countries that pay for their emissions under the trading system from unfair competition, will have to not pay a carbon price on certain items imported into the EU.
Currently, the regulation focuses on carbon-intensive items like fertilizers, electricity, iron and steel, cement, and hydrogen products.
There is no price to be paid for carbon yet, and CBAM will be the first to be implemented in 2026. Less carbon produced during the ammonia production process would be beneficial for the world and the environment.
When the Adnoc internal ammonia projects become part of Fertiglobe, the company will explore strategies like exchanging products.
For example, instead of exporting ammonia produced in the US to Asia, it can supply Europe, thereby saving freight costs. It would also reduce transportation costs and lower pollution.
Adnoc revealed last month that it had acquired a thirty-five percent ownership investment in ExxonMobil, the oil giant, to build a hydrogen and ammonia production facility in Texas.
Adnoc’s project, which is the largest in the world, will produce more than one million tonnes of low-carbon ammonia annually and up to one billion cubic feet of hydrogen per day, with 98 percent of the carbon dioxide removed.has context menu