Russian LNG giant Novatek inks ammonia supply deal with Germany’s Uniper

Rusian LNG giant Novatek said it has signed a deal to supply ammonia from its planned Obskiy gas chemical complex to Germany’s Uniper.

Under the term sheet, Novatek would deliver up to 1.2 million tons of low-carbon ammonia per year to primarily German market, the firm said on Wednesday.

Also, the independent gas and LNG producer said the product price would be indexed to relevant European and global benchmarks.

The term sheet details the terms of the supply from Novatek’s Obskiy GCC project, which would include CCS facilities.

Moreover, Uniper would receive the fuel at its planned ammonia import terminal in Wilhelmshaven. The facility would feature an ammonia cracker operating with renewable power, Novatek said.

Uniper would transform the imported ammonia into gaseous hydrogen and feed it into the future German hydrogen pipeline system, as well as supply it directly as a clean feedstock and as a fuel, it said.

This term sheet follows the signing of a hydrogen cooperation deal between the duo in January this year.

Novatek’s chief executive and Russian billionaire Leonid Mikhelson said the firm considers ammonia as the most efficient hydrogen carrier for seaborne transportation.

“We are now at the pre-FEED stage for a low-carbon ammonia and hydrogen plant with CCS facilities, and signing of term sheets for long-term supply demonstrates growing demand for low-carbon products, which is an essential precursor for the final investment decision on this project,” he said.

“The plant will be located next to our LNG cluster in Yamal in order to minimize the infrastructure costs and provide the most competitive clean energy supplies to the global market,” Mikhelson said.

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