Fertiglobe becomes ADNOC’s platform for low-carbon ammonia growth globally

Fertiglobe is a seaborne exporter of urea and ammonia combined, exporting to 53 countries with a ~10% collective market share of global trade in these products.

The acquisition represents a milestone in ADNOC’s ambitious chemicals growth strategy, the expansion of its low-carbon fuels business, and supports its goal to become a top five global chemicals player.

Fertiglobe will become the platform for ADNOC’s growth in fertilizer and low-carbon ammonia. To deliver value accretive and disciplined growth for Fertiglobe, ADNOC will transfer its stakes in existing and future low-carbon ammonia projects to Fertiglobe at cost and when ready for startup, creating a growth platform for low-carbon ammonia as a key energy transition fuel. This includes its two lower carbon ammonia projects in Abu Dhabi and other projects in its global portfolio. On a consolidated basis, the two projects in Abu Dhabi would add ~2 million tpy, more than doubling Fertiglobe’s current merchant ammonia capacity of 1.6 million tpy and increasing its total sellable capacity to 8.6 million tpy of net ammonia and urea combined, in addition to other announced global projects.

His Excellency Dr. Sultan Ahmed Al Jaber, ADNOC Managing Director and Group CEO, said: “ADNOC’s majority shareholding in Fertiglobe marks another milestone in the delivery of our ambitious international chemicals growth strategy and goal to become a top five chemicals player.”

Fertiglobe’s current management team will stay in place, including Ahmed El-Hoshy in his continued role as Fertiglobe’s CEO. Ahmed El-Hoshy spent 15 years growing OCI’s US and European business in ammonia and methanol via greenfields, brownfields and acquisitions generating significant value for shareholders by leading recent divestments.

Ahmed El-Hoshy commented: “The successful completion of the ADNOC transaction is a historic milestone for Fertiglobe. Positioned as the vehicle of ADNOC’s plans to establish a global growth platform for ammonia, Fertiglobe is poised to meet the increasing global demand for low-carbon solutions and bring us closer to a more sustainable future.”

Fertiglobe will continue to grow its low-carbon fuels business following its success in the recent H2Global bid where it secured €397 million of renewable ammonia offtake to Europe at a delivered price of €1000/t until 2033. The limited capital expenditure requirements for this project lead to attractive returns for the company.

Robust double-digit IRRs for all future growth projects will be the minimum target for the company as it seeks disciplined and value accretive growth to capitalise on the expected global growth in low-carbon ammonia demand to 24 million t by 2032, from close to zero now.

Expected market tailwinds from increasing applications for low-carbon ammonia will see demand growth exceed supply growth by an estimated 11 million t up to 2032, according to industry consultants. ADNOC aims to capture 5% of the global low-carbon hydrogen market by 2030 in support of the UAE’s National Hydrogen Strategy.

Fertiglobe announced that it will share a detailed value creation and growth strategy during its Capital Markets Day in Q1 2025.

Read the article online at: https://www.worldfertilizer.com/nitrogen/17102024/fertiglobe-becomes-adnocs-platform-for-low-carbon-ammonia-growth-globally/