Ammonia, which does not emit carbon dioxide (CO2) during combustion, is attracting attention as a next-generation energy source for reducing greenhouse gases (GHG). JERA, which is funded by TEPCO Holdings and Chubu Electric Power Company, Incorporated., has signed a memorandum of understanding (MOU) for collaboration with Malaysian state-owned oil companies, and Japanese companies such as ITOCHU Corporation are also collaborating with Russian companies to build a value chain for blue ammonia. They embarked on a commercialization survey (FS). (The image is a flow diagram of the ammonia value chain. Reprinted from the official website of ITOCHU Corporation)


In early July, ITOCHU will work with Russia’s Irkutsk Oil (IOC), Japan Oil, Gas and Metals Mineral Resources Organization (JOGMEC), and Toyo Engineering (TOYO) to build a blue ammonia value chain between Eastern Siberia and Japan. It was revealed that it was agreed to carry out a commercialization survey (FS) as Phase 2 following Phase 1 of the implementation in FY2020.


Similar to Phase 1, ITOCHU and TOYO are planning to build a master plan for a value chain that converts natural gas produced by the IOC in Eastern Siberia into ammonia and transports it to Japan.


In Phase 2, a conceptual design for producing hydrogen and even ammonia from natural gas produced in the IOC's East Siberian oil fields is carried out for the commercialization of a large-scale blue ammonia value chain from Eastern Siberia to Japan. 


In the conceptual design, it is assumed that the IOC will combine CO2-EOR (enhanced oil recovery method by CO2 injection) to increase the production of oil fields held by the IOC in Eastern Siberia for carbon dioxide (CO2) emitted during the production process. In addition, it will consider applying railroads and pipelines for inland ammonia transportation.


ITOCHU is currently collaborating with the IOC on the exploration, development and production of crude oil in the Eastern Siberia region. While aiming for a carbon dioxide-free society, they will realize the production and efficient transportation of ammonia, which is expected to be a new market as a fuel in the future, and blue ammonia (produced by the conventional ammonia production process derived from fossil fuels) in the Japanese market. They aim to provide a stable supply of ammonia produced by carbon dioxide capture and storage (CCS), which isolates CO2 underground, and by adding it to the CO2-EOR process.


At the end of last year, ITOCHU, IOC, JOGMEC, and TOYO agreed to conduct a joint commercialization survey on the ammonia value chain between Eastern Siberia and Japan. Since ammonia has almost the same liquefaction conditions as liquefied petroleum gas (LPG) that is generally distributed, it can be transported and stored in the same infrastructure. Ammonia does not emit CO2 when burned, so it is attracting attention as a next-generation fuel for thermal power plants and marine engines.


In addition, JERA has signed a memorandum of understanding (MOU) with Malaysia's state-owned oil and natural gas company Petronas regarding collaboration in the decarbonization field. With the abolition of coal use and increasing demand for liquefied natural gas (LNG) in the global market, they will promote the use of LNG, especially in Asian countries, and establish a supply chain for ammonia and hydrogen fuels. Petronas is also known as an ammonia manufacturer, and is also approaching the production of green ammonia derived from renewable energy.


On the other hand,  Osaka Gas Co., Ltd. has recently begun to strengthen cooperation between domestic companies, such as starting a demonstration experiment with Toyota Industries Corporation to develop technology related to a small engine system with ammonia fuel. The two companies aim to establish the basic technologies necessary for product development by the end of FY 2022.


The Japanese government policy seems to be related to the background of domestic companies strengthening ammonia production. Earlier this year, the Ministry of Economy, Trade and Industry (METI) put together a plan to increase domestic consumption of ammonia from about 1.08 million tons / year in 2019 to 3 million tons / year in 30 years and 30 million tons / year in 50 years. 


Ammonia is currently mainly used for fertilizers and industrial use, but it plans to use it as a fuel for coal-fired power generation in the future. By setting these goals and stimulating demand, the government seems to be aiming to increase the number of companies aiming to enter the market.


Jiro Arihara

Journalist based in Tokyo. In addition to approaching trends in international politics and the world economy from the perspective of resources such as energy, minerals, food & grain etc.