Lotte Fine Chemical, OCI Global join hands for clean ammonia business

Lotte Fine Chemical Co., a subsidiary of Lotte Chemical Corp., and Europe’s No.1 clean ammonia producer OCI N.V., or OCI Global, will collaborate in the clean ammonia value chain from ammonia production to distribution and ammonia bunkering infrastructure.

Under the memorandum of understanding signed on Monday by Lotte Fine Chemical and OCI, South Korea’s largest producer of ammonia will import blue ammonia to be produced at the Netherlands-headquartered company’s factory in Texas, which is due to open in 2025.

The two companies will also build an ammonia bunkering network for ammonia-powered vessels.

They plan to jointly build the distribution network for ammonia to be stored at OCI’s ammonia storage facilities in Rotterdam, a major port city in the Netherlands, and near the Suez Canal in Egypt.

Under the agreement, Lotte Fine Chemical will also import bio-ammonia, manufactured from corn and woody biomass, for the first time in Korea.

The Korean company will supply OCI’s bio-ammonia to Korean plastic producers. Plastic products made from bio-ammonia can enjoy tax benefits when they are exported to Europe after receiving bio certificates.

Lotte Fine Chemical has been actively expanding its clean ammonia business with its parent Lotte Chemical, which plans to invest 6 trillion won ($4.7 billion) by 2030 to produce 1.2 million tons of clean ammonia a year under a target to earn 5 trillion won in annual sales from hydrogen and ammonia business.

Lotte Fine Chemical is developing the technology to extract hydrogen from ammonia for industrial use.

Lotte Chemical also agreed with Japan's Mitsubishi Corp. and German energy company RWE in February to jointly build clean ammonia production and export facilities in the Port of Corpus Christi, Texas. The facilities will produce both green and blue ammonia.

Low-carbon ammonia has emerged as an alternative energy for decarbonization.

“We will strive to be the industry’s first to bring in changes to the market with pre-emptive measures to prepare for the clean hydrogen and ammonia era,” said Kim Yong-seok, chief executive officer of Lotte Fine Chemical.

Write to Seo-Woo Jang at suwu@hankyung.com

Sookyung Seo edited this article.