Fertiglobe emerges as sole winner in pilot H2Global auction

UAE-based fertiliser company Fertiglobe (ADX:FERTIGLB) has won the pilot H2Global auction and will deliver up to 397,000 tonnes of green ammonia by 2033 from Egypt to Europe at a contract price of EUR 1,000 (USD 1,085) per tonne, including transport costs.

Deliveries are planned to begin in 2027, depending on the production start date and supply availability, with an initial shipment of 19,500 tonnes of renewable ammonia in the first year.

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Under the contract with the H2Global Foundation, Fertiglobe will receive up to EUR 397 million from the auction's EUR 900 million budget. The net product price is EUR 811 per tonne which corresponds to a price of less than EUR 4.50 per kg of green hydrogen, the German economy ministry said.

The renewable ammonia will be produced at Fertiglobe’s existing ammonia plant in Ain Sokhna, Egypt with green hydrogen from the Egypt Green Hydrogen project, developed by Norwegian renewables company Scatec in partnership with Fertiglobe and Orascom Construction. It will be transported to storage tanks at Ein El Sukhna Port via an existing 7 km pipeline. The renewable ammonia will be delivered to the Port of Rotterdam and sold by German state-owned company Hintco in batches of 500 tonnes through annual auctions.

Fertiglobe will source the hydrogen needed for the production of ammonia from Scatec under a 20-year offtake agreement that was signed during the EU-Egypt Investment Forum at the end of June. Thanks to the deal, Scatec, which holds a majority 52% share in the Egypt Green Hydrogen project, expects to reach a final investment decision (FID) on the project in the first half of 2025.

The pilot auction, initiated at the end of 2022, sought to secure the supply of green ammonia, methanol and e-sustainable aviation fuel (SAF) from non-EU countries in three lots. In the first lot of the auction, focused on renewable ammonia, 22 companies or consortia from five continents submitted bids, with Fertiglobe being selected as the winner from a pool of five finalists. Lots 2 and 3 were designated for renewable methanol and eSAF, respectively. However, no contract was awarded for eSAF and the funds intended for eSAF will be redirected to the ongoing Lot 2 for renewable methanol.

Image source: HintCo