All posts by hlancey@bloomberg.net

UK Cooperative Inks Deal with Thomas Bell

Europe, News Briefs

The UK’s Mole Valley Farmers has inked a long-term agreement with fertilizer importer, manufacturer, and distributor Thomas Bell & Sons Ltd., which will see the South Molten, Devon-based farmers cooperative store and process product on behalf of Thomas Bell, the UK’s largest farming news portal Agriland reported.

According to Mole Valley Farmers, the agreement will allow it to purchase larger cargoes of raw materials, bringing significant cost savings and security of supply to its farmer shareholders. The cooperative’s fertilizer plant in Newport on the Isle of Wight is the only farmer-owned blending facility in the UK.

Mole Valley Farmers is also investing more than £600,000 (approximately $728.4 million at current exchange rates) in additional storage facilities at its Newport blending plant, which will increase capacity to 30,000 mt when complete.

The new partnership, along with an agreement in principle with Association British Ports, means the site will be capable of supplying more than 150,000 mt of fertilizer per year, according to the report.

GSM Chemical to Build ATS Plant in Tatarstan

Ammonium Sulfate, Amthio, News Briefs, Russia

Moscow-based GSM Chemical has secured approval to build a plant to produce ammonium thiosulfate (ATS) in the Russian republic of Tatarstan.

Tatarstan’s Investment Council approved the RUB667 million (approximately $7.2 million at current exchange rates) project on Nov. 1, Interfax reported, citing Tatarstan’s Investment Development Agency.

The plant will be built in the Mendeleyevsky district, the location of Tatarstan’s largest fertilizer producer, nitrogen and methanol producer JSC Ammoni. GSM plans to produce fertilizer based on ATS, according to the report.

Construction is set to begin next year and production is targeted to start in the second half of 2025, with the plant expected to reach design capacity in 2028. The planned design capacity of the plant was not disclosed in the report.

GSM Chemical’s existing plants include LiquiForce LLC, a producer of fertilizer, and Gras LLC, a producer of ammonium sulfate, as well as the JSC Karpov Chemical Plant and Bioforte-Tual, a producer of pharmaceuticals, according to the company’s website.

BASF Announces More Investment Cuts

Ammonia, China, Europe, Germany, News Briefs, Russia

Some of Germany’s biggest industrial firms have started to make deep and lasting cuts, an acknowledgment that persistent headwinds like higher energy costs and muted economic growth now require structural changes, according to a Bloomberg report. 

“We are not simply postponing investments,” BASF SE CEO Martin Brudermüller said on Oct. 31 as he announced a plan to cut investment by almost 15% over the next four years. “We are reducing the number of projects and will implement alternative measures that involve lower” capital expenditures.

Brudermüller announced in February that the company would be closing a number of energy-intensive plants at its Verbund site, its main site in Ludwigshafen, including one of two ammonia production facilities, a caprolactam plant, and associated fertilizer facilities (GM Feb. 24, p. 1).

German industrial companies from BASF to Volkswagen AG are facing up to a new reality after profiting for decades from cheap Russian gas, China’s insatiable demand for their goods, and low interest rates. The challenges have been building for years and are no longer viewed as temporary problems. 

Workers are starting to feel the effects in earnest. “Lack of new orders continues to have a negative impact,” said Klaus Wohlrabe, Head of Surveys for the Ifo Institute, a Munich-based research institute. “Energy-intensive sectors in particular are planning with fewer staff.” 

German steelmaker Kloeckner & Co SE reported on Oct. 30 that it was cutting jobs after lowering its 2023 guidance. Chemical firm Lanxess AG is slashing 7% of its workforce as high energy prices and cratering global demand continue to drag on the industry. According to a recent Ifo survey, employment intentions for the industry are at their lowest level since the early months of the coronavirus pandemic.

At the same time, companies are confronting a decline in global demand, particularly in China, which has driven profit growth across industries in recent years. Overall German economic output shrank in the third quarter, according to the federal statistics agency, raising the risk that Europe’s largest economy is heading for a recession. Germany is the only major economy that the International Monetary Fund sees contracting this year.

BASF, which released its third-quarter results on Oct. 31, said sales fell across all geographical areas, with the drop particularly pronounced in Germany. The company said it now expects sales to come in at the lower end of its €73-€76 billion guidance range this year. BASF plans to reduce its overall investment for the next four years to €24.8 billion from an original budget of €28.8 billion. 

The chemical firm also increased the scale of its cost-saving plan in back-office areas. It now sees total annual cost savings of €1.1 billion by 2026 across production and administration areas, up from the €500 million it announced in February. 

VCI, the country’s trade group for the chemicals industry, expects production to fall by 11% in 2023, excluding pharmaceuticals. Meanwhile, the European Chemical Industry Council anticipates a drop of 8% across the region this year, with no imminent recovery in demand expected.

“Our energy-intensive companies will no longer be able to continue for a long time with high energy costs that threaten their existence in Germany,” VCI President Markus Steilemann wrote earlier this month in an appeal for government help with higher energy costs.

NeuRizer Announces Fund Raise for Urea Project

Australia, News Briefs, Urea

Aspiring Australian urea producer NeuRizer Ltd. (formerly known as Leigh Creek Energy) has announced a one-for-ten renounceable rights issue to raise up to approximately A$3.2 million (approximately $2 million at current exchange rates) before costs.

The new shares are being offered at 2.5 Australian cents each, and for every single new share subscribed, eligible shareholders will receive one free attaching new option with an exercise price of 7 cents and term of two years, Adelaide-based NeuRizer said in an Oct. 30 ASA release.

The company said the rights issue price represents a discount of 19% on NeuRizer’s last close of A$0.031 on the ASX and 26% on NeuRizer’s 30-day WWAP of A$0.034. The rights issue started on Nov. 1 and will close on Nov. 17, 2023, unless extended.

NeuRizer said funds raised under the offer will be used for working capital purposes while it completes the strategic partner and associated fundraising process required to complete the EPCC and achieve a financial investment decision for its NeuRizer Urea Project in South Australia (GM Sept. 22, p. 29).

The project is planned to have an initial capacity of 1 million mt/y of urea and would utilize in-situ gasification (ISG) based on coal from the decommissioned Leigh Creek coal mine some 550 kilometres north of Adelaide (GM Aug. 5, 2022).

The company revealed in September that it has also had preliminary discussions on the acquisition of an ammonia and urea plant that is currently operating and has begun due diligence on another after signing a confidentiality agreement.

YCA, Höegh Autoliners Sign Clean Ammonia Deal

Ammonia, News Briefs, Norway

Yara Clean Ammonia (YCA), a division of Yara International ASA and the world’s largest ammonia distributor, and Oslo-based global ocean transportation provider Höegh Autoliners have agreed on a future supply deal for clean ammonia, Yara reported on Nov. 2.

The two companies signed a Letter of Intent (LOI) in May to partner around the supply, potential distribution, and delivery for consumption of clean ammonia for the Höegh Autoliners’ new Aurora-Class PCTC vessels. The 12 Aurora Class vessels will be the world’s largest and most environmentally friendly car carriers ever built, equipped to operate on zero-carbon ammonia and methanol, Yara said.

As part of the LOI, the companies will also consider the supply of blue ammonia, where up to 95% of the CO2 emissions are captured and permanently stored.

“This is exactly the type of collaboration that will accelerate a push towards net zero shipping in the deep-sea segment of the industry,” said Höegh Autoliners  CEO of Andreas Enger. “For Höegh Autoliners, this represents another step towards full decarbonization of our customers’ supply chains, and we are pleased to collaborate with a strong Norwegian global player to meet this goal.”

Norway has set ambitious targets for cutting emissions from domestic shipping by 50% by 2030. In July this year, the International Maritime Organization (IMO) adopted a target of zero emissions for international shipping by 2050.

GIC, Petronas to Invest in India Project

Asia, Germany, Green Ammonia, Green Hydrogen, India, Japan, News Briefs, South Korea

Singapore’s sovereign wealth fund GIC Pte and a unit of Malaysian energy giant Petroliam Nasional Bhd. (Petronas) will invest in a project that aims to produce 5 million mt/y of green ammonia from locations across India.

Gentari, Petronas’ renewable energy arm, and an affiliate of GIC will invest in the project being developed by AM Green, set up by the founders of Indian clean energy company Greenko Group, the companies said in a joint statement.

AM Green hopes to reach the full capacity target, equivalent to around 1 million mt/y of green hydrogen, by 2030, according to the statement. Exports of green ammonia to markets including Singapore, Japan, South Korea, and Germany will start by late 2025. 

India is aiming for net zero by 2070, and AM Green joins heavyweights Adani Group and Reliance Industries Ltd. in announcing ambitious plans for green hydrogen and ammonia in the country. “Achieving this scale of production will place the new venture among the world’s pioneers in large scale and cost-competitive green ammonia production,” the companies said.

Bloomberg reported last month that Petronas was nearing a deal to acquire a minority stake in the ammonia unit of AM Green for about $1.6 billion.

Citigroup Global Market India Pvt. Ltd. and Cyril Amarchand Mangaldas acted as financial and legal advisors to AM Green for the transaction. Gentari was advised by Bank of America Securities, the Malaysian company said in a separate statement.

Temasek Unit Co-Leads $22 M Investment in Talus

Green Ammonia, News Briefs

A unit of Temasek Holdings Pte Ltd. co-led a $22 million investment round in the world’s first producer of onsite green ammonia plants, Talus Renewables, according to Bloomberg.  Temasek’s Xora Innovation and Material Impact Inc. led the series A funding round, Talus said on Nov. 2. Cavallo Ventures Inc. and Rice Investment Group also invested.

Talus last month installed its first plant at a farm owned by Kenya Nut Co. in Naivasha, near the capital Nairobi (GM Oct. 13, p. 1). The operation uses solar power to split water atoms, freeing up hydrogen to be mixed with nitrogen to create the fertilizer. Talus also has an agreement with Landus Cooperative in Iowa.

“While most companies in the green ammonia space are still in the product development or project planning phase, Talus has already begun delivering systems to customers and is poised for rapid growth,” said Phil Inagaki, Xora’s Managing Director.

First Ammonia, Uniper Partner on Green Ammonia

Ammonia, Germany, Green Ammonia, News Briefs, U.S.

New York-based First Ammonia and German energy company Uniper, Dusseldorf, on Oct. 31 announced that they are cooperating in First Ammonia’s proposed green ammonia project in the Port of Victoria, Texas (GM Dec. 23, 2022). The ammonia will be delivered to Uniper.

“We are excited to partner with Uniper to deliver green ammonia to the global market from our 100% carbon-free, innovative flagship project in Texas,” said First Ammonia CEO Joel Moser. “This groundbreaking project brings together Texan renewable electricity with the flexibility of cutting-edge electrolyzers from our technology partner Topsoe in Denmark (GM Sept. 16, 2022), the local knowledge and support of the Victoria Economic Development Corp., and now the global perspective of Uniper as a front runner in the transition towards greener gases. We look forward to a long and successful partnership with Uniper.”

First Ammonia said this is the world’s first modular commercial-scale green ammonia plant. It expects production to begin in 2026. The company said that each 100 MW module will initially produce up to 100,000 mt/y of green ammonia and be zero carbon compared to 180,000-240,000 mt/y of CO2 from a grey ammonia plant.

Based on its contract with Topsoe, First Ammonia said it could eventually produce up to 5 million mt/y of green ammonia.

Itochu, Orascom Ink MOU for NH3 Bunkering

Ammonia, Japan, News Briefs

Japan’s Itochu Corp. and Egypt’s Orascom Construction Plc have inked a Memorandum of Understanding (MOU) for the joint development of ammonia bunkering in the Suez Canal.

“This MOU is an important milestone in the adoption of ammonia as a marine fuel and a necessary step toward the realization of a proposed integrated project, consisting of the construction of a global ammonia supply chain and the development of ammonia-fueled ships by Itochu and its partner companies,” Itochu said on Oct. 25.

Together with Orascom Construction and future partners, Itochu said it aims to establish a global supply chain by promoting the joint development of ammonia bunkering in the Suez Canal in Egypt. The Japanese company to date has been promoting the development of ammonia bunkering in Singapore and the Strait of Gibraltar with partner companies.

Grupa Azoty Explores Decarbonization Projects

Ammonia, Hydrogen, News Briefs, Poland

Polish fertilizers and chemicals group Grupa Azoty SA reported on Nov. 2 that it is exploring opportunities for collaborative decarbonization projects with potential US partners and the import of clean ammonia from the US.

“Among various cost areas, ammonia represents a significant focus for Grupa Azoty. This includes production costs, the cost of feedstock, and costs associated with its carbon footprint,” the Polish group said in a media statement.

“Consequently, Grupa Azoty is actively seeking to establish partnerships with major decarbonized ammonia operators in the US. Ultimately this move could enhance Grupa Azoty’s position in the EU fertilizer producer market and further bolster the decarbonization initiatives within the framework of the group’s Green Strategy,” the company said.

The initial course of action was discussed during the US Gulf Coast-Central Europe Cooperation in Clean Hydrogen conference organized by Grupa Azoty and held in Warsaw on Nov. 2. During the conference, discussions were conducted with the intention of formalizing agreements for future collaboration, Azoty said.