H2Global launches first green ammonia tender

Seeking deliveries to Europe from 2024

H2Global’s mechanism to promote P-to-X ramp-up. Hintco will now conduct its first ammonia tender for a ten-year purchase agreement. Source: H2Global.
Click to enlarge. H2Global’s mechanism to promote P-to-X ramp-up. Hintco will now conduct its first ammonia tender for a ten-year purchase agreement. Source: H2Global.

H2Global (via its implementation entity Hintco) has launched its first tender process for the import of “green” ammonia to Belgium, the Netherlands or Germany. Ammonia produced in non-EU and EFTA states is eligible, with the long-term purchase agreements running for ten years from 2024. Hintco is currently endowed with €900 million to enact its contract-for-difference initiatives, with €360 million of that total to be used for this ammonia tender. Hintco anticipates the shortlist will narrow down to a handful of potential suppliers.

The production of the hydrogen derivatives must take place outside the EU and EFTA states. The price will be set in a competitive international bidding process. The period of the long-term purchase agreements is 10 years. The first deliveries of these sustainable hydrogen derivatives to Europe are planned for the end of 2024 or early 2025. This is the first global tender procedure of its kind.

The funding instrument will conclude long-term purchase agreements with fixed criteria to enable investment security, which has been lacking so far. Under the funding instrument, Hintco purchases products at the lowest possible price through a competitive bidding process. On the demand side, short-term sales contracts will be concluded with the highest bidder. The expected difference between the prices is compensated with public funding.

Announcement and funding instrument details, from H2Global’s official press release, 8 Dec 2022

In terms of “green” criteria, for the purposes of the tender Hintco assumes the hydrogen will be produced via electrolysis powered by renewable energy (and in compliance with various other sustainability requirements). Vigorous checks will be run before the tender is awarded.

German public gas company VNG prepares for ammonia imports into Rostock

VNG and Total Eren will work towards ammonia imports into Europe from 2028, with Total Eren’s production projects (eg. H2 Magallanes in Chile) as the source. VNG is already planning a clean energy hub in Rostock thanks to a deal earlier this year with Equinor, which will include a massive CCS hydrogen production facility. Emissions will be captured, processed and then shipped north by Equinor. The hub is also intended to be a key entry point for ammonia imports into Germany, with hydrogen pipelines to extend south into industrial areas around Berlin and Leipzig.

VNG Handel & Vertrieb (H&V), the trading and sales subsidiary of VNG, and Total Eren’s cooperation will enable VNG to offtake the green ammonia on the German coast and make it available to its customers directly or in the form of hydrogen from 2028 onwards.

The cooperation agreement will govern both companies’ understanding of the overall value chain and contribution to it, including optimised shipment to Europe, transportation to final usage, and green certification, while partnering with best-in-class suppliers and relying on relevant stakeholders’ support.

Details of the agreement with Total Eren, from VNG’s official press release, 22 Nov 2022
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