Japanese firms look to domestic ammonia bunkering

A group of Japanese firms, including one of Japan's major ammonia producers, have agreed to jointly work on developing domestic ammonia bunkering infrastructure, aiming to tap its potential as a marine fuel.

Japanese trading house Itochu and its energy trading arm Itochu Enex, chemicals firm Ube Industries and shipping firm Uyeno Transtech announced today they have agreed to set up a joint venture on supplying ammonia as a marine fuel and development of domestic supply bases. The project is part of an integrated project by Itochu and Itochu Enex, including joint development of ammonia-fuelled vessels, as well as ammonia supply infrastructure in Japan and in Singapore, according to Itochu.

Itochu will be responsible for development and construction of domestic ammonia supply bases and ammonia bunkering vessels for the project. The company also is planning to work on building partnerships with Japanese and foreign companies, including shipping firms. Itochu Enex is expected to carry out research and development on possible domestic supply sites.

Ube Industries will carry out a study on the supply of ammonia as a marine fuel and development of an onshore supply facility for the joint project, taking advantage of its expertise as one of Japan's leading ammonia producers. The company said it is pursuing the project under its 2050 goal to reduce the firm's greenhouse gas (GHG) emissions by 80pc.

Ube Industries in October last year formally merged its wholly-owned subsidiary Ube Ammonia Industry, which produces ammonia from petroleum coke for chemicals feedstock at Yamaguchi prefecture's Ube. The merger was targeted to strengthen its ammonia business and increase business efficiencies through unified management of ammonia operations. Ammonia output at the subsidiary during the April 2019-March 2020 fiscal year was up by 25pc on a year earlier at 385,000t. The Ube operation is now the firm's sole ammonia production plant, having halted ammonia production in 2014 at its 200,000 t/yr Sakai plant in Osaka prefecture.

Uyeno Transtech is planning to study development of an ammonia bunkering vessel and safety standards for refuelling of the toxic material, banking on its expertise in LNG bunkering. The company is participating in Eco Bunker Shipping, which began LNG bunkering operations in Tokyo bay in 2018.

Japan is exploring ammonia's potential as a fuel, targeting to expand fuel use consumption to 3mn t/yr by 2030. The global shipping industry is also considering ammonia as a viable alternative fuels to decarbonise the industry, while accelerating efforts to develop ammonia-fuelled vessels that now could become available by 2025.

Japanese trading house Sumitomo this week joined a feasibility study on supply of green ammonia and ship-to-ship bunkering in Singapore. The study is assessing supplying LPG as an initial fuel for the project before shifting to ammonia, and eventually to green ammonia as storage, vessels and barges designed for LPG can also handle ammonia. Green ammonia is produced from renewable sources without any GHG emissions.

Japan's domestic demand for ammonia is around 1mn t/yr for nitrogen feedstock and industrial use, with domestic supplies covering 80pc of the total demand. Ammonia imports in 2020 dropped by 9pc from a year earlier to around 213,000t.

By Rieko Suda