NewBase May 19-2022 Energy News issue - 1514 by Khaled Al Awadi.pdf

Copyright © 2022 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 1
NewBase Energy News 19 May 2022 No. 1514 Senior Editor Eng. Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Saudi Aramco keeps oil and gas contract activity buzzing with Zuluf
TradeArabia News Service
Despite global oil and gas industry contract activity in the first quarter of 2022 remaining stifled due
to the Russia-Ukraine conflict, Saudi Aramco bucked the trend awarding the Zuluf oil field expansion
contracts.
GlobalData’s latest report, ‘Q1 2022 Global Oil & Gas Industry Contracts Review’, reveals that the
number of contracts saw a minor increase from 1,452 in Q4 2021 to 1,546 in Q1 2022. However,
overall contract value decreased significantly from $61.16 billion in Q4 2021 to $36.93 billion in Q1
2022.
In the second half of the quarter, however, a minor increase in the number of contracts was reported.
Unfortunately, the industry was unable to maintain its position in terms of contract value compared
to the previous quarter, according to GlobalData, a leading data and analytics company.
Saudi Aramco’s multiple awards
Saudi Aramco’s award of multiple contracts for the expansion of the Zuluf oil field in Saudi Arabia,
including EPC work to JGC Holdings ranging between $2 billion and $2.5 billion for two sets of oil
and gas separation units, gas compression units, and onshore processing facilities such as crude
oil processing units, as well as EPC for injection water pumps, water-oil separation units, thermal
oil systems, electrical and non-electrical facilities, kept project activity alive.
Another notable contract would be those awarded to the National Petroleum Construction Company
(NPCC) for construction work associated with the fourth and fifth Zuluf packages, where the fourth
package CRPO 82 includes at least 12 oil-handling wellhead topsides, two oil tie-in platforms, and

one electrical distribution platform, and the fifth package CRPO 83 includes up to 12 additional oil-
handling wellhead topsides, two oil tie-in platforms, as well as infield pipelines and cables.
Pritam Kad, Oil & Gas Analyst at GlobalData, comments: “Contracts in the oil and gas industry could
only float due to the sheer uncertainties surrounding it, including the ongoing Russia-Ukraine crisis,
rising prices, and project cost escalation.”
In terms of single scopes, operation and maintenance (O&M) represented 56% of the total contracts
in Q4 2021, followed by procurement with 16%, and contracts with multiple scopes, such as
construction, design and engineering, installation, procurement, and O&M accounted for 14%.-
Zuluf oil field expansion details
The aging offshore infrastructure at the Zuluf oil field is being replaced with modern electrified platforms to
extend the operational life of the field. A single well observation platform and three oil production deck
manifolds along with associated subsea pipelines are being installed as part of the expansion.
New onshore central processing facilities to be built as part of the Arab Heavy (AH) Crude Oil Increment 600
MBCD initiative of the Zuluf field development program will include a new gas and oil separation plant
(GOSP), gas compression facilities, a new water injection plant, and associated pipelines.
The onshore central processing facility will process 600,000 barrels of Arabian Heavy crude from the Zuluf
field. The stabilized crude oil from the processing facility will be sent to the Ju'aymah crude oil terminal, while
the separated gas and condensate will be sent to the Tanajib gas plant through new downstream pipelines.
Infrastructure at the Zuluf oil field
The Zuluf oil field is developed with more than 270 producing wells and four offshore GOSPs capable of
processing a total of 800,000 barrels of Arab Medium crude oil a day. Originally built in 1983, the GOSP-3
was closed in 1995 due to low demand for Arabian Medium crude oil.
Saudi Aramco, however, decided to restart the plant in 2016, as a result of which the GOSP-3 was repaired
and brought on stream in 2017. The plant has the capacity to process 250,000 barrels of oil and 100 million
metric standard cubic feet (Mmscf) of gas a day. A five-story residential platform with a total area of 3,750m²
was also renovated as part of the GOSP-3 renovation project.

Saudi PIF-backed EV maker Lucid to produce 150,000 cars a
year at its Saudi factory .. The National - Alkesh Sharma + NewBase
Lucid Group, which is backed by Saudi Arabia's sovereign wealth fund, the Public Investment Fund
(PIF), said its new factory in the kingdom will have a production capacity of 155,000 units a year.
Its new facility is expected to address growing demand for electric vehicles by increasing Lucid’s
global production capacity to 500,000 EVs per year in the coming years, the company said.
The US-listed EV maker on Wednesday hosted a ceremonial signing event to mark the February
agreements with various entities including the Ministry of Investment of Saudi Arabia, the Saudi
Industrial Development Fund (SIDF), the Economic City at King Abdullah Economic City and Gulf
International Bank.
The agreements are estimated to provide financing and incentives worth $3.4 billion to Lucid over
the next 15 years to build and operate a manufacturing facility in the kingdom, the EV maker said.
“This signing ceremony marks yet another step forward in the realisation of Lucid’s mission to inspire
the adoption of sustainable energy, and I am delighted this brand-new manufacturing facility will
come to fruition here in Saudi Arabia,” said Peter Rawlinson, Lucid’s chief executive and chief
technology officer.
Lucid plans a phased global expansion with Saudi Arabia – the Arab world’s largest economy.
“I am truly delighted to partner with PIF, our signing partners, and the government of Saudi Arabia
in advancing our shared vision of global sustainability,” Mr Rawlinson said. Saudi Arabia, the Arab
world's biggest economy, is in the midst of an economic diversification drive under its Vision 2030
agenda. A key area of focus is to support the sustainable development goals of all economic

sectors, with the country aiming to achieve net-zero carbon emissions by 2060 through a circular
carbon economy approach.
A part of this strategy is the transition to greener means of transportation. The rapid growth of the
kingdom's EV market even led Saudi to reach a top-50 spot for the first time in New York-based
consultancy AlixPartners' latest Automotive Electrification Index, which was released last month.
Last month, Lucid also signed an agreement with the kingdom's government for the sale of 100,000
cars that will support Riyadh's sustainability drive.
The deal with the kingdom's Ministry of Finance — which will include the flagship Lucid Air and other
future models — covers a 10-year period and includes an initial commitment to purchase 50,000
vehicles, plus an option for up to 50,000 additional cars over the same period.
"With today’s signing ceremony, we are taking a major step towards Saudi Arabia's goal of
diversifying its economy by creating a new manufacturing hub to spearhead the future of mobility
for the Middle East region,” Minister of Investment Khalid Al Falih said.
“This project demonstrates the confidence investors have in Saudi Arabia's competitiveness, its
ability to create opportunity and serve global demand for a highly complex product such as electric
vehicles.”
At its Saudi plant, AMP-2, Lucid plans to establish operations initially for re-assembly of Lucid Air
vehicle kits that are pre-manufactured at the company’s US AMP-1 facility in Casa Grande, Arizona,
and, over time, for production of complete vehicles.
It expects construction of the
plant to “commence shortly”.
Vehicles will be initially
scheduled for the Saudi
Arabian market, but Lucid
plans to export finished
vehicles to other global
markets as well.
Bandar Alkhorayef, the Minister
of Industry and Mineral
Resources and chairman of
SIDF, said the automotive
industry in the kingdom is one
of the important sectors
supported by the national industrial strategy.
"We look forward to working with Lucid and other leading companies, while continuing to build our
global expertise,” he said.
Global sales of EVs more than doubled to 6.6 million in 2021, according to the International Energy
Agency. Almost a million EVs a month will be added to the global fleet in the second half of 2022,
BloombergNEF estimates showed.
“PIF partners with leading global innovators, like Lucid, to shape the economies of the future and
drive the economic transformation of Saudi Arabia in line with Saudi Vision 2030,” Turqi Al Nowaiser,
PIF’s deputy governor and head of international investments division, said.

Europe fills gas storage at record rate as Asia's buyers step aside
REUTERS/Christian Charisius
Europe's gas inventories are rebuilding after winter at the fastest rate on record as the region's
buyers outbid competitors from Asia to acquire as much gas as possible at any price. Stocks in the
European Union and United Kingdom (EU28) have risen by 151 terawatt-hours (TWh) since the
start of April and 159 TWh from their post-winter low on March 19.
Storage is filling even faster than during the lockdowns in the first wave of the pandemic in 2020,
according to data from Gas Infrastructure Europe ("Aggregated gas storage inventory", GIE, May 17).
The storage deficit that emerged in the second quarter of 2021 and persisted through the winter has
been eliminated (https://tmsnrt.rs/37VE1r6). Stocks are now at 450 TWh, almost exactly in line with
the prior 10-year average and 21 TWh above the pre-pandemic five-year average for 2015-2019.
Europe's gas buyers have proved willing to pay much more for deliveries in the short term than their
counterparts in Asia. Futures contracts for deliveries in July 2022 to Northwest Europe are trading
at almost $100 per megawatt-hour compared with just $68 for deliveries to Northeast Asia.

ASIA GAS STOCKS
Asia's LNG buyers have been less active than normal and inventories in the region have been
allowed to fall compared with the seasonal average. China does not publish gas inventory levels,
but LNG imports have been significantly below prior-year levels every month so far in 2022,
according to customs data.
LNG imports declined to 17.3 million tonnes in the first three months of the year compared with the
19.7 million in the same period in 2021, the first decline for at least seven years. China's increasing
coronavirus outbreaks and lockdowns have severely disrupted industrial activity and household
spending, which is likely to have reduced gas consumption.
But most gas consumption comes from residential and commercial heating rather than power
generation so the downturn likely reflects a decision to allow stocks to fall rather than pay
exceptionally high prices.
Japan's gas inventories have also been allowed to decline as utilities decline to pay record prices
in competition with Europe. Stocks fell to 1.49 million tonnes at the end of February, the latest data
available, the second lowest for the time of year since 2015.
Japan imported significantly less LNG in both January and February this year than in 2021, data
from the Ministry of Economy, Trade and Industry show.

To some extent, Asia's importers have stepped aside as Europe races to fill storage as quickly
possible in case pipeline supplies from Russia are interrupted by the war with Ukraine and
sanctions.
But it likely means Asia's buyers will have to accelerate purchases later in the year, keeping prices
elevated, even if Europe's own storage remains on track to become full over the next few months.

EU to map out €210 Billion escape route from Russian fossil fuels
Reuters
The European Commission will on Wednesday unveil a 210 billion euro plan for how Europe can
end its reliance on Russian fossil fuels by 2027, and use the pivot away from Moscow to quicken its
shift to green energy.
The invasion of Ukraine by Russia, Europe's top gas supplier, has prompted the European Union
to rethink its energy policies amid sharpened concerns of supply shocks. Russia supplies 40% of
the bloc's gas and 27% of its imported oil, and EU countries are struggling to agree sanctions on
the latter.
To wean countries off those fuels, Brussels will propose a three-pronged plan:-
1- a switch to import more non-Russian gas,
2- a faster rollout of renewable energy, and
3- more effort to save energy, .
The draft measures, which could change before they are published, include a mix of EU laws, non-
binding schemes, and recommendations national governments could take up.
Taken together, Brussels expects them to require 210 billion euros in extra investments - which the
EU plans to support by freeing up more money for the energy transition from its COVID-19 recovery
fund, and which would ultimately reduce the billions of euros Europe spends on fossil fuel imports
each year.
The plans outline a short-term dash for non-Russian gas supplies, highlighting the potential to
increase imports of liquefied natural gas from countries including Egypt, Israel and Nigeria, plus
infrastructure needed to pivot away from Russia.

Europe's gas demand is expected to drop by about a third by 2030 under the bloc's targets to fight
climate change, and the proposals are expected to outline aims to produce 10 million tonnes of
renewable hydrogen by 2030 and import another 10 million tonnes - which could be used to replace
gas in industry, to avoid locking in years of emissions.
The Commission is considering proposing higher targets to expand renewable energy and energy
efficiency - with a 45% share of renewable energy by 2030, replacing its current 40% proposal. A
13% cut in EU energy consumption by 2030, against expected use, is also under discussion to
replace a current 9% proposal.
Other parts of the package include an upgraded law offering one-year simplified permits for some
wind and solar projects, to slash the years-long permitting deadlines that hold up projects.
New EU schemes to jumpstart a large-scale rollout of solar energy would also attempt to cut gas-
fuelled power and heating in homes, offices and factories, by requiring countries to install solar
energy in all new public buildings from 2025, according to another draft.

US: bp and Linde plan major CCS project to decarbonization
Source: bp
Key Points:-
 Project to include carbon capture and storage (CCS) and low carbon hydrogen production
 With potential start-up by 2026, project aims to store up to 15 million metric tons of CO2 per
year in multiple sites – the equivalent of removing approx. 3 million cars from the road
 Engaging with additional emitters to decarbonize Texas Gulf Coast.
bp and Linde, a leading global industrial gases and engineering company, have announced plans
to advance a major carbon capture and storage (CCS) project in Texas that will enable low carbon
hydrogen production at Linde’s existing facilities. The development will also support the storage of
carbon dioxide (CO2) captured from other industrial facilities – paving the way for large-scale
decarbonization of the Texas Gulf Coast industrial corridor.
Upon completion, the project will capture and store CO2 from Linde’s hydrogen production facilities
in the greater Houston area – and potentially from its other Texas facilities – to produce low carbon
hydrogen for the region. The low carbon hydrogen will be sold to customers along Linde’s hydrogen
pipeline network under long-term contracts to enable production of low carbon chemicals and fuels.
bp and Linde plan major CCS project to advance decarbonization efforts across Texas Gulf Coast
As part of the project, bp will appraise, develop and permit the geological storage sites for
permanent sequestration of the CO2. bp’s trading & shipping business aims to bring custom low

carbon solutions to the project, including renewable power and certified natural gas, along with
commodity trading and price risk management expertise.
Linde will use its proprietary technology and operational expertise to capture and compress the CO2
from its hydrogen production facilities for the project. Together with its extensive infrastructure of
hydrogen production facilities and its storage cavern connected through its pipeline network across
the Texas Gulf Coast, this project will enable Linde to supply cost-effective, reliable low carbon
hydrogen and, together with bp, provide carbon capture and storage solutions.
Dave Lawler, chairman and president of bp America, said: 'The energy expertise in Texas and
strong supply chains have been generations in the making. This new low carbon energy project will
help us leverage those strengths for the next chapter of the energy transition.
In particular, it can help decarbonize hard-to-abate industries for the greatest potential impact on
emissions while protecting jobs. bp is proud to support this project as we continue delivering on our
own strategy and net zero ambition.'
The project will be a further important step in the development of bp’s low carbon business. bp is
evaluating large-scale CCS and hydrogen projects for industrial clusters in the US and already is in
action on Teesside, the industrial heart of the United Kingdom.
'Linde is committed to lowering absolute carbon emissions 35% by 2035 and reaching climate
neutrality by 2050. Capturing the CO2 from our hydrogen production plants in the Houston area will
be a significant step towards achieving these goals,' added Dan Yankowski, president, Linde Gases
North America.
'We are excited to bring Linde’s leading technology portfolio and infrastructure to support this project
and make low carbon hydrogen available to our customers in the Gulf Coast. More broadly, Linde
is well positioned to enable similar projects, be it in the Gulf Coast where we operate two hydrogen
pipelines and a hydrogen storage cavern or elsewhere in the US.'
The overall development, expected to be operational as early as 2026, will also enable capture and
storage of CO2 from other large industrial facilities in the region and could ultimately store up to 15
million metric tons per year across multiple onshore geologic storage sites – the equivalent of taking
approximately 3 million cars off the road each year.

NewBase May 19 -2022 Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Oil prices recoup early losses on China hopes, global supply fears
Reuters + NewBase
Oil prices rose on Thursday, recovering from early losses, on hopes that planned easing of
restrictions in Shanghai could improve fuel demand while lingering concerns over tight global
supplies outweighed fears of slower economic growth.
Brent crude futures for July were up $1.53, or 1.4%, at $110.64 a barrel at 0447 GMT, after falling
by more than $1 earlier in the session. U.S. West Texas Intermediate (WTI) crude futures for June
rose 93 cents, or 0.8%, to $110.52 a barrel, recovering from an early loss of more than $2. WTI for
July was up $1.57, or 1.5%, at $108.50 a barrel.
Both benchmark prices fell about 2.5% on Wednesday.
Oil price special
coverage

"A slump in Wall Street soured sentiment in early trade as it underlined concerns over weakening
consumption and fuel demand," said Satoru Yoshida, a commodity analyst with Rakuten Securities.
Asian shares on Thursday tracked a steep Wall Street selloff as investors fretted over rising global
inflation, China's zero-COVID policy and the Ukraine war. "Still, oil markets are keeping a bullish
trend as a pending import ban by the European Union on Russian crude is expected to further
tighten global supply," Yoshida said.
The European Commission unveiled on Wednesday a 210 billion euro ($220 billion) plan for Europe
to end its reliance on Russian fossil fuels by 2027, and to use the pivot away from Moscow to
quicken its transition to green energy. read more
Also, U.S. crude inventories (USOILC=ECI) fell last week, an unexpected drawdown, as refiners
ramped up output in response to tight product inventories and near-record exports that have forced
U.S. diesel and gasoline prices to record levels.
Capacity use on both the East Coast and Gulf Coast was above 95%, putting those refineries close
to their highest possible running rates. In China, investors are closely watching plans in the country's
most populous city, Shanghai, to ease restrictions from June 1, which could lead to a rebound in oil
demand at the world's top crude importer.
Stephen Innes from SPI Asset Management said news that Shanghai planned to gradually resume
inter-district public transport from May 22 was positive for risk and supporting oil prices. ($1 = 0.9537
euros).
Stronger U.S. dollar contributes to higher crude oil prices in
international markets… Source: U.S. Energy Information Administration,
The price of Brent crude oil, the world benchmark, has increased in 2022, partly as a result of
Russia’s full-scale invasion of Ukraine. In addition, a strong U.S. dollar means that countries that
use currencies other than the U.S. dollar pay more as crude oil prices increase. Since June 1, 2021,
the Brent crude oil price has increased by 59% in U.S. dollars and by 86% in euros.

The U.S. dollar index measures the value of the U.S. dollar against six currencies: the euro, yen,
British pound, Canadian dollar, Swiss franc, and Swedish krona. When the U.S. dollar index
increases, it means the U.S. dollar is gaining value against those currencies. Conversely, it also
means those other currencies are losing value against the U.S. dollar.
Crude oil is generally priced in
U.S. dollars, so purchases in
other currencies are not only
affected by the dollar price of
crude oil but also by the
exchange rate to the dollar. The
price of crude oil and the value of
the dollar generally move in
opposite directions so these
factors offset each other.
Recently, however, the price of
Brent crude oil and the value of
the U.S. dollar have both
increased.
Recent increases in short-term
U.S. treasury yields may be
contributing to higher demand for U.S. government bonds, which increases demand for U.S. dollars
and, therefore, the value of the U.S. dollar against other currencies.
Source: Graph by the U.S. EIA, based on data from Intercontinental Exchange as compiled by Bloomberg L.P.
The value of the U.S. dollar also increases when it is considered a safer investment compared with
other currencies. Recent global events, including Russia’s full-scale invasion of Ukraine and
concerns caused by COVID-19 mobility restrictions in China, may also be increasing demand for
the U.S. dollar.

NewBase Special Coverage
The Energy world –May -01 -2022
CLEAN ENERGY
Ammonia co-firing in power plants could be worth $100bn in
2050, says Woodmac
Energy Voice + NewBase
While hydrogen can be used in many sectors, its derivative, ammonia, has emerged as a key tool
to provide flexible power generation and integrate variable renewables. Analysis by energy research
company Wood Mackenzie shows that a 10% ammonia co-firing in global coal plants would translate
to 200 million tonnes (Mt) of ammonia demand, a potential market of $100 billion by 2050.
Power generation in Germany. Ammonia could help decarbonise thermal power generation.
While hydrogen can be used in many sectors, its derivative, ammonia, has emerged as a key tool
to provide flexible power generation and integrate variable renewables. Analysis by energy research
company Wood Mackenzie shows that a 10% ammonia co-firing in global coal plants would translate
to 200 million tonnes (Mt) of ammonia demand, a potential market of $100 billion by 2050.
Thermal generation is the largest source of power and heat in the world today. In 2021, the share
of thermal generation was 70% in Asia Pacific, and 50% in Europe and Americas combined. Amid
rising power demand and a strong focus on decarbonisation globally, there is an urgent need to
replace thermal power generation plants with renewables and battery storage or pair with new

technologies such as carbon capture, utilisation and storage (CCUS) to abate emissions. A quick
replacement of these thermal power plants will be costly as the thermal fleets in several countries
still have many years of useful life, said Wood Mackenzie.
With commodity prices at record highs, and expected to remain elevated for some time, priorities
have shifted. Security and diversity of supply are front of mind for policymakers. Any progress in
reducing reliance on single fuels or single suppliers is becoming important. The ability to co-fire
ammonia or low-carbon hydrogen in thermal generation is an increasingly attractive proposition,
even if costs may be higher.
Speaking at the APPEA conference in Brisbane today, Prakash Sharma, Vice President of Multi-
Commodity Research at Wood Mackenzie said: “The possibility to burn low-carbon hydrogen and
ammonia in thermal power plants provides countries with an additional tool for decarbonising the
power generation sector. This strategy allows for optimisation of power plants, while maintaining
grid resiliency and lower carbon intensity of power generation.
“Just a 10% use of ammonia co-firing in coal plants could result in a 50% growth from today to 200
Mt of ammonia demand by 2050, and this is a $100 billion market opportunity. Additionally, co-firing
will deliver a 10% reduction in carbon emissions, a strategic benefit in markets with physical
limitations to build renewables and CCUS capacity.”
While the costs of renewables and electrolysers will continue to decline, resulting in lower costs of
production for green hydrogen, the hydrogen value chain, particularly the midstream, is complex as

it considers processing, storage, shipping, and reconversion for different carriers of hydrogen and
different transportation methods. Hydrogen needs to be competitive at the point of delivery or end
use, not at the point of production.
Sharma said: “When looking at power generation, ammonia is one available option to be used
directly either by itself or by co-firing with no reconversion cost needed. Our analysis shows on
average the delivered cost of low-carbon ammonia to Japan is expected to fall 60% from $1,250
per tonne (t) currently to under $500/t by 2050.”
Wood Mackenzie considered both blue and green hydrogen production in Australia, Canada, Chile
and the Middle East for delivery to Japan. Ammonia was assumed as the preferred carrier method
across all four trade routes as the end-use application for the case study is ammonia co-firing in
power plants, and there would be no requirement for reconverting ammonia back to hydrogen.
Japan’s power utilities are taking a lead in co-firing ammonia in both coal- and gas-fired power
plants. Initial tests have shown encouraging results, and commercial operations are scheduled to
start around 2025. South Korea also recently expanded plans to co-fire hydrogen and ammonia in
thermal power plants.
Although ammonia co-firing is currently uncompetitive, even with a carbon price, the prospect of
rapidly falling costs combined with supportive policies will lower the levelised cost of electricity
(LCOE) to $90 per megawatt-hour by 2050, reckons Wood Mackenzie.
As ammonia delivered costs to Japan could fall to $500/t or lower in the long term, ammonia
combustion in thermal power plants would become a feasible decarbonisation strategy and
comparable to CCUS-paired plants. To support this shift, Wood Mackeznie estimates carbon pricing
requirements would need to be $40-$120/t of carbon dioxide equivalent in 2050 for 20% and 60%
co-firing shares, respectively.
Sharma said: “While liquid hydrogen offers the lowest cost to reconversion and highest purity,
infrastructure and capability is in its infancy. Ammonia, on the other hand, can leverage existing
infrastructure and can be used directly in power generation and as a shipping fuel.

“Reaching net zero emissions requires rapid electrification of energy systems through support from
hydrogen, ammonia and other green technologies. The entire hydrogen value chain, as well as the
end-use application, should therefore be considered when choosing the most suitable hydrogen
carrier and supplier into key markets.”
JERA Planning to Shift Coal Power Fleet to 100% Ammonia
Japanese firm JERA, a joint venture between TEPCO and Chubu Electric, on Oct. 13 issued a
roadmap to achieve zero carbon emissions by 2050.
The move is notable for the company whose business includes a sizable global liquefied natural
gas (LNG) portfolio of five upstream projects, 20 fleet carriers, an LNG tank capacity that is
equivalent to 30% of Japan’s tank capacity, and 11 LNG terminals in Japan.
It also owns 27 thermal power stations in Japan, which have a total capacity of 70 GW, and another
30 power projects, including renewables, in more than 10 countries, which amount to about 9 GW.
Under its roadmap, JERA plans to shutter its entire 2.2 GW supercritical coal power generation fleet
in Japan by 2030, and then gradually increase the ratio of mixed combustion of fossil fuels to
ammonia and hydrogen at ultrasupercritical plants.
1. JERA’s 4.1-GW Hekinan Thermal Power Station is one of the world’s biggest coal plants. The
plant houses five units. Units 1, 2, and 3 are 700-MW units that opened between 1991 and 1993,
and Units 4 and 5, 1 GW each, opened in 2001 and 2002. Courtesy: JERA
Co-Firing Planned at a 4.1-GW Coal Plant
That effort will begin within the next decade with projects to demonstrate ammonia co-firing at
the 4.1-GW Hekinan Thermal Power Station in Aichi Prefecture (Figure 1), and a hydrogen co-firing
demonstration at another power plant.
Over the next decade, JERA also plans to promote offshore wind power projects and further improve
the efficiency of LNG thermal power generation. In the first half of the 2030s, the company wants to
achieve a 20% ammonia co-firing rate at all its coal plants, and it is seeking to shift to 100% ammonia
by the 2040s.
It notes, however, that its zero-carbon business strategy will depend heavily on “advances in
decarbonization technology, economic rationality, and consistency with government policy.”
To that end, JERA is developing the decarbonization technologies it plans to use. Its ammonia plans
stem from a collaboration with Japanese giants IHI Corp. and Marubeni Corp., along with Australian

natural gas and LNG producer Woodside Energy. The companies launched a feasibility study with
Japan’s New Energy and Industrial Technology Development Organization (NEDO) this March.
Slated to wrap up in February 2021, the study will essentially involve a technical analysis to inform
JERA’s demonstration for direct use of ammonia as a fuel source in pulverized coal boilers, as well
as evaluate the economics of equipment costs, operational costs, and the costs of producing and
transporting ammonia.
Interest in Ammonia Is Growing
Ammonia—a compound of nitrogen and hydrogen—“can efficiently transport and store hydrogen at
low cost and in addition to its role as an energy carrier, it can be directly used as fuel in thermal
power generation,” the companies explained.
According to the Ammonia Energy Association (AEA), interest in exploring the gas as a
decarbonizing fuel has soared of late because it does not emit carbon dioxide when it is burned. To
date, the 2004-established industry coalition has 76 members.
Its power generating members include AES, Arizona Public Service, ENGIE, ITM Power, Nebraska
Public Power District, Origin Energy, Shell, Total, and Tri-State Generation and Transmission.
IHI, JERA, and Marubeni, notably, are board members on Japan’s Green Ammonia Consortium,
and their emphasis on ammonia is backed by Japan’s International Resource Strategy, which the
Ministry of Economy Trade and Industry (METI) issued in March.
The strategy explicitly calls for demonstration projects to promote ammonia as a fuel. Japan,
notably, also announced on Oct. 28 it will seek to be carbon neutral by 2050, a shift that will require
a fundamental revision of its policy on coal plants.
But as the AEA noted, much progress has already been achieved in Japan, led mainly by IHI, which
is already developing a broad portfolio of ammonia fuel technologies, including a solid oxide fuel
cell, gas turbine, industrial boilers, and co-fired thermal power boilers.
Ammonia-coal co-firing has also already been demonstrated, first by Chugoku Electric in July
2017 at its 156-MW Mizushima Thermal Power Station Unit 2 with a fuel mix composed of 0.6% to
0.8% ammonia, and then by IHI in March 2018 at a “large-capacity combustion facility” in Aioi City,
with a fuel mix composed of 20% ammonia.
As Bunro Shiozawa, a senior associate at Sumitomo Chemical Co., wrote in an AEA blog post this
October, IHI’s demonstration, which involved a coal-ammonia burner that can be attached to an
existing coal plant, confirmed that at 20% ammonia co-firing carbon emissions decreased 20%, and
while nitrogen oxide could be largely reduced, the boiler’s heat rate did not change significantly.
Under the study with NEDO, four companies plan to survey the full ammonia-coal lifecycle from
ammonia production to power generation (Figure 3). IHI plans to evaluate the thermal efficiency of
ammonia co-firing using a numerical analysis, but the company will also study ammonia storage
and supply facilities, as well as ammonia co-firing burners.
3. A March 2020–launched feasibility study being conducted by three major Japanese coal
generators and an Australian gas producer, in collaboration with Japan’s New Energy and Industrial
Technology Development Organization, will evaluate all aspects of ammonia-coal co-firing from
production to power generation. Courtesy: JERA
JERA’s role in the feasibility study involves identifying and resolving challenges related to the
application of ammonia co-firing in commercial coal plants. It will also study specifications on

ammonia storage, vaporizers, and evaluate necessary costs and capital investments. Marubeni will
look into methods to tamp down the carbon footprint of ammonia, and to improve its transportation
efficiency, including by using larger-sized vessels to reduce costs. Finally, Woodside will study
challenges related to realizing large-scale ammonia production plants and assess ways to reduce
production costs.
Other notable industry initiatives to explore ammonia power associated with the Green Ammonia
Consortium include Mitsubishi Power’s agreements with Indonesia’s Bandung Institute of
Technology in May to “probe new fuel technologies using ammonia and hydrogen to reduce
greenhouse gas emissions, and to enhance technologies for diagnosing the operation of
Indonesia’s power plants through use of artificial intelligence (AI) and big data analysis.”
3. Japan’s Green Ammonia Consortium envisions a multi-pronged strategy for the production and
use of carbon-free ammonia fuel. As Shigeru Muraki, representative director of the consortium,
explained in March 2020, taking into account all cost components, transmission and distribution of
hydrogen as ammonia is likely the cheapest mechanism for imports to Japan from Australia.
Source: The Green Ammonia Consortium

NewBase Energy News 20 May 2022 - Issue No. 1514 call on +971504822502, UAE
The Editor:” Khaled Al Awadi” Your partner in Energy Services
NewBase energy news is produced Twice a week and sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscriptions, please email us.
About: Khaled Malallah Al Awadi,
Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
www.linkedin.com/in/khaled-al-awadi-38b995b
Mobile: +971504822502
khdmohd@hawkenergy.net or khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with over 30 years of experience in the Oil & Gas
sector. Has Mechanical Engineering BSc. & MSc. Degrees from leading U.S.
Universities. Currently working as self leading external Energy consultant for the GCC
area via many leading Energy Services companies. Khaled is the Founder of the
NewBase Energy news articles issues, Khaled is an international consultant, advisor,
ecopreneur and journalist with expertise in Gas & Oil pipeline Networks, waste
management, waste-to-energy, renewable energy, environment protection and
sustainable development. His geographical areas of focus include Middle East, Africa
and Asia. Khaled has successfully accomplished a wide range of projects in the areas
of Gas & Oil with extensive works on Gas Pipeline Network Facilities & gas compressor
stations. Executed projects in the designing & constructing of gas pipelines, gas
metering & regulating stations and in the engineering of gas/oil supply routes. Has drafted
& finalized many contracts/agreements in products sale, transportation, operation & maintenance
agreements. Along with many MOUs & JVs for organizations & governments authorities. Currently dealing
for biomass energy, biogas, waste-to-energy, recycling and waste management. He has participated in
numerous conferences and workshops as chairman, session chair, keynote speaker and panelist. Khaled is
the Editor-in-Chief of NewBase Energy News and is a professional environmental writer with over 1400
popular articles to his credit. He is proactively engaged in creating mass awareness on renewable energy,
waste management, plant Automation IA and environmental sustainability in different parts of the world.
Khaled has become a reference for many of the Oil & Gas Conferences and for many Energy program
broadcasted internationally, via GCC leading satellite Channels. Khaled can be reached at any time, see
contact details above.

NewBase May 19-2022 Energy News issue - 1514 by Khaled Al Awadi.pdf

Recommended

Recommended

More Related Content

Similar to NewBase May 19-2022 Energy News issue - 1514 by Khaled Al Awadi.pdf

Similar to NewBase May 19-2022 Energy News issue - 1514 by Khaled Al Awadi.pdf (20)

More from Khaled Al Awadi

More from Khaled Al Awadi (15)

Recently uploaded

Recently uploaded (20)

NewBase May 19-2022 Energy News issue - 1514 by Khaled Al Awadi.pdf