Ammonia for Long-Haul Hydrogen Transport

Converting hydrogen to ammonia will improve its low energy density by a factor of 1,270

Colleagues,

We received questions about hydrogen and ammonia. While we are updating our research, we would like to share with you this report that we posted last December. It was included in a long report on the oil and gas markets.

Main Takeaways

• Hydrogen's low energy density will involve huge investments in its storage and transport segments

• Converting hydrogen to ammonia will improve its low energy density by a factor of 1,270

• About 200 available LPG tankers can carry ammonia cargoes

• The existing market for ammonia is around 180 MTPA

• Ammonia trade represents more than 10% of its global production

A reliable and flexible energy system requires the capability to store and dispatch large amounts of fuel source from production sites to demand centers. In the case of hydrogen, having a very low energy density (the amount of energy stored per unit volume) is one of the technical challenges for turning hydrogen into a key component in the future energy system.

A lower energy density implies that storing and dispatching large amounts of hydrogen will involve very large volume areas. At ambient temperature and pressure, hydrogen takes up 3,000 times the volume of gasoline containing an equivalent amount of energy. However, technology always provides innovative solutions for several energy problems.

Increasing hydrogen energy density could be achieved by pressurizing it to an elevated pressure of 690 bar (which is called compressed gaseous hydrogen CGH2) or chilling it to its liquid phase at -253 degrees Celsius (which is called liquid hydrogen, LH2). In its compressed gaseous form, energy density can be increased by a factor of 450 to reach 4.5 megajoules per liter (MJ/L), while in the liquid form, energy density can be increased by a factor of 844 to reach 8.491 MJ/L.

Theoretically, pressurizing hydrogen or chilling it is possible, but commerciality is the main issue. In fact, the existing technology is still not readily available at a large scale to facilitate substantial production, storage, and transportation of hydrogen at elevated pressures or very low temperatures. While liquid hydrogen has a higher energy density than gaseous hydrogen, it still represents a fraction of LNG as shown in Figure (4) below, so its production and transportation will be more expensive.

Figure (4)

Ammonia Production from Hydrogen

Another available option to scale up hydrogen use in the future energy system is to convert it to ammonia by the “Haber-Bosch” process. Through this process, hydrogen and nitrogen react in the presence of a catalyst at high temperatures and pressures to produce ammonia, NH3. Ammonia is gaseous at ambient temperature and becomes liquid at -33 degrees Celsius. This requires much less energy than liquid hydrogen stored below -253 degrees Celsius.

In its liquid form, ammonia has an energy density of 12.7 MJ/L which is 1.5 times that of liquid hydrogen (8.5 MJ/L), or 3 times that of compressed gaseous hydrogen (4.5 MJ/L).  Hence, ammonia could be useful for long-distance hydrogen transport with fewer ships needed for the same amount of energy, and it can also serve as a marine fuel.

An Established Industry: Key Figures

Ammonia production is a well-established industry. The existing market for ammonia, which is mainly used to produce urea and fertilizers, is around 180 million tons per annum (MTPA). According to the International Energy Agency (IEA), ammonia trade represents more than 10% of its global production.

In 2020, ammonia was the world's 413th most traded commodity, with a total trade of $6.46 billion. Many countries are producing ammonia, and some are also exporting it. China, the United States of America (USA), and Russia are the top ammonia producers. In these countries, ammonia is derived from less expensive fossil fuels (from natural gas in the USA and Russia, and from coal in China). 

Some investors would probably be interested in knowing that transporting ammonia via sea is widely available. The annual seaborne ammonia trade is estimated at 20 million tons.  About 200 LPG/ammonia ships are in operation and can carry ammonia, with 40 of them being able to be fully loaded with ammonia at any point in time. The LPG/ammonia gas carriers are typically in the range of 15,000 m3 – 85,000 m3, with three common sizes for LPG/ammonia trade of 30,000 m3, 52,000 m3, and 80,000 m3. These ships trade ammonia between 120 ports equipped with ammonia terminals.

Ships for transporting liquid hydrogen, meanwhile, are unavailable so far. At present, only one vessel is under construction for this purpose. In 2020, Kawasaki Heavy Industries completed the basic design for its Spherical Liquefied Hydrogen Storage Tank which will have a cargo capacity of 11,200 m3. Although it is considered the largest capacity of its kind, it is way lower than a typical ammonia cargo, and therefore it won’t be useful for transporting large amounts of hydrogen to distant markets.

Figure (5)

Ammonia Export Projects in MENA Region

Many companies have announced plans to invest in producing and exporting ammonia— either green or blue ammonia. In the MENA region, for instance, over 50 hydrogen supply projects have been announced to date, with the majority of them aiming at exporting hydrogen via ammonia carriers.  Saudi Arabia, the UAE, and Oman are the main Gulf countries that have the potential to become export hubs for ammonia to markets in Asia and Europe.

Challenges

Ammonia is a toxic and hazardous compound. Due to these risks, it is difficult to widely use it as a hydrogen carrier, and some markets will require further safety procedures for handling it. Furthermore, converting hydrogen to ammonia for transportation, and then cracking it back to hydrogen at the destination market will cause energy losses that could range between 8-18% of the produced hydrogen energy content. This will add an extra cost to the hydrogen production cost, although the overall cost will remain lower in comparison with liquid hydrogen production.

Could Ammonia be a Good Option?

Despite the risks, ammonia could serve as a suitable option for hydrogen exports, thanks to its higher energy density, proven production, and transport technology. Due to this, only a few investments are required for transporting hydrogen after converting it to ammonia. Altogether, these factors minimize risks for investors who are willing to enter the promising hydrogen sector which receives government support in several countries. EOA