Horisont Energi has signed a letter of intent (LoI) with VNG Handel & Vertrieb GmbH (VNG), a wholly owned subsidiary of the German energy company VNG AG, regarding the offtake of clean ammonia from the Barents Blue project in Hammerfest in Northern Norway – Europe´s largest clean ammonia plant project.
As a major German gas importer and wholesaler, VNG H&V intends to purchase clean ammonia from Horisont Energi as part of the LoI. The aim is to make the ammonia available to VNG H&V's customers, particularly in the industrial sector, either directly or in the form of hydrogen. The agreement sets out a long-term partnership for clean ammonia supply targeting a quantity of 100,000-300,000 tons per year starting from 2028, corresponding to 10%-30% of the capacity at the planned Barents Blue plant.
'The agreement with VNG marks another leap forward in the development of Barents Blue as Europe's largest clean ammonia plant to meet the surging demand for clean ammonia and hydrogen. We are also adding another strong new German partner as we continue to build a clean ammonia value chain and are delighted to have joined forces with a highly competent organization and dedicated team', says Bjørgulf Haukelidsæter Eidesen, CEO Horisont Energi.
Conventional ammonia production today accounts for approximately one percent of global CO2 emissions, and the transition to clean ammonia plays a critical role in the European Commission’s ambition to reduce the EU’s dependency on fossil imports. Clean ammonia is also a crucial element in the ‘Fit for 55’ ambition to reduce emissions by 55 percent in 2030 compared to 1990 levels.
VNG has held reliable relationships with Norwegian energy companies for over 30 years and will continue to work closely with them in the future. 'With this agreement, we are strengthening the German-Norwegian partnership in the energy sector. At the same time, we are taking another important step towards driving forward the decarbonisation of Germany. The demand for blue ammonia will multiply in the coming decades, both as a hydrogen carrier and to decarbonise fertilisers, shipping, and other industries,' added Ulf Heitmüller, CEO of VNG AG.
Combined with the Polaris CCS project, Barents Blue will offer clean ammonia with a 99% CO2 capture rate and a correspondingly low carbon footprint compared to conventional production. Horisont Energi targets a final investment decision for the 1 million tonnes plant in 2024/2025, with estimated production start in 2028.
The agreement with VNG comes after Horisont Energi and Fertiberia recently signed a joint development agreement for the Barents Blue project, and the announcement in September that PIGNiG Upstream Norway intends to join Horisont Energi as an operating partner in the Polaris CCS storage license. The plan is for Polaris to offer the Barents Blue CO2 storage for its captured carbon.
Horisont Energi has already secured sufficient power supply for the first stage of the Barents Blue project, which has secured NOK 482 million of funding as a grant from Enova, the Norwegian government’s enterprise to promote a faster transition to low-emission society. The funding is part of the IPCEI hydrogen program, Hy2Use.
Source: Horisont Energy
