Yara Clean Ammonia signs Egypt renewable ammonia offtake agreement

The latest agreement with Yara builds on a previous deal between parties developing green ammonia production capacity in Egypt, adding a clear signal of demand for the end product.

Egyptian Petrochemicals Holding Company (ECHEM) and Misr Fertilizers Production Company (MOPCO) last year entered a new joint development and shareholder agreement with Norwegian renewable energy company Scatec, forming a new company Damietta Green Ammonia Company to use green hydrogen in the production of green ammonia in Egypt.

The companies have agreed to develop up to 480 MW of renewable energy and an electrolyser facility of up to 240 MW to produce green hydrogen. The renewable hydrogen will then be used as a feedstock in ammonia production at an existing ammonia production facility in Damietta owned by MOPCO. 

The agreement targets production of 150,000 tonnes of green ammonia per year and is expected to begin in 2027. The $890m project scope includes a seawater desalination plant and a jetty to enable green ammonia exports at Damietta, according to Egypt’s Minister of Petroleum and Mineral Resources, Tarek El Molla.

Scatec has also signed a letter of Intent with the European Investment Bank (EIB) for long-term financing for the project.

"We are very pleased to be signing this Heads of Terms with global industry leader Yara Clean Ammonia. This is a testament to Scatec's position in Egypt and our strategy to focus on developing renewable hydrogen projects related to existing ammonia production capacity," said Scatec CEO Terje Pilskog.

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"This project will further strengthen our sourcing portfolio of renewable ammonia and is a testimony to Yara Clean Ammonia as the most preferred off-taker as the world's largest trader and distributor of ammonia. Once the project has reached a final investment decision, the renewable ammonia from this project will help us reliably serve our customers across several market sectors," says Yara Clean Ammonia CEO Hans Olav Raen.

"Today's signature is a further step towards our efforts in working with our partners from the private sector to support translating Egypt's national low carbon hydrogen strategy into action through specific projects," said Egyptian Minister of Petroleum and Mineral Resources, H.E. Tarek El Molla. "Such collaboration and partnerships will help secure renewable hydrogen investments, de-risk implementation of projects and facilitate realising Egypt's vision of becoming a regional and global green hydrogen hub."

"Enabling industry to harness renewable energy is key for the green transition. Accelerating renewable hydrogen production in Egypt can strengthen business competitiveness and unlock opportunities to export renewable hydrogen. The European Investment Bank looks forward to working with Scatec and project partners to unlock large scale renewable hydrogen investment across Egypt," says EIB Vice President Gelsomina Vigliotti.

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Green ammonia was a key topic at a two-day EU-Egypt investment conference over the weekend, resulting in billions of dollars of agreements between companies in the Egypt and the european bloc.