Oman green ammonia plant FID expected next month

Renewable energy companies Acme and Scatec could take a final investment decision (FID) on the $650mn first stage of their planned green ammonia export plant in Oman next month, Acme's president and director for green hydrogen and ammonia, Ashwani Dudeja, said at the World Hydrogen Mena conference in Dubai today.

India's Acme and Norway's Scatec are waiting for their respective boards to give approval, which is a formality at this point, Dudeja said. The first stage of the project is a 100,000 t/yr plant connected to off-grid solar assets. Acme plans to add a new module of the same size every six months. If it reaches the full size envisaged, the project will employ around 3.5GW of electrolysis powered by 5.5GW of renewable power generation to produce 1.2mn t/yr of green ammonia, with the investment cost expected to be around $5bn-6bn, Dudeja said.

The project could be the first facility of its scale, with a target to start production in early 2025, Dudeja said. This could follow other firsts that the company has achieved, according to Dudeja, including the first pre-certification for green ammonia and possibly the first large offtake deal with a company unaffiliated with a project. Norwegian fertiliser producer Yara's subsidiary Yara Clean Ammonia last year struck a deal for offtake of the full 100,000 t/yr from the first phase.

The deal with an unaffiliated partner differentiates Acme and Scatec's plant from other projects being developed in the region, such as Saudi Arabia's planned Neom site, which has now reached financial close and from where supply will be taken exclusively by one of the co-developers, US industrial firm Air Products, for the next 30 years.

Both Acme and Neom have stressed the importance of securing long-term offtake deals to secure financing. The main hurdle for developing green ammonia projects is finding credible buyers willing to commit to 20-year fixed-price offtake agreements, which banks want to see before they finance the projects, Dudeja said. But project developers are finding it difficult to tie down offtakers to long-term fixed-price contracts because market participants expect improvements in technology to render first-mover projects less competitive in a few years' time.

The novelty of the project has also created some challenges, as the developers had no precedent for such long-term clean ammonia agreements to inform their negotiations, Dudeja said. Acme and Scatec have secured a 92km² plot of land and construction permits, he said. They have ordered equipment worth $70mn from their own equity "to ensure the project is not delayed", he added. The developers have ordered equipment included a loading jetty, ammonia production technology and an ammonia storage tank.

By Aidan Lea