Ammonia Industry Expansion at Port of Rotterdam Signals Growing Demand for Global Ammonia Storage

This is the first piece in the new Energy Transition section of the newsletter. This section will highlight news related to the role of terminals in the Energy Transition.

Led by the Port of Rotterdam Authority, a pre-feasibility study on the establishment of a large-scale ammonia cracker at the port is expected to release its first results soon.[1] The initiative, a joint effort between eighteen companies including Shell, BP, and ExxonMobil, aims to evaluate the cracking facility’s potential to convert imported ammonia into one million tons of hydrogen per year. If the findings are positive, the establishment of this facility would help meet Europe’s decarbonization and climate objectives, while driving demand for increased ammonia storage.

The Port of Rotterdam study is one of several economic signals of the projected increase in ammonia demand over the next several decades and the importance that its storage will play in the energy transition. Currently, 70% of ammonia is used to make fertilizers, but as the energy industry ramps up its use of ammonia as a hydrogen carrier and fuel source, there is likely to be a substantial growth in demand.[2] According to the International Energy Agency, ammonia demand in 2050 will total over 350 million tons (Mt), with 125 Mt of that demand resulting from the use of ammonia as an energy carrier. For context, total global production of ammonia was 185 Mt in 2020. As the energy transition continues to increase ammonia demand, new fuel and energy applications will emerge for liquid terminals.

Utilizing ammonia as a fuel, feedstock, or commodity requires more liquid terminals dedicated to ammonia trade, transportation, and fueling. Almost all ammonia is stored in tanks, and the United States alone contains more than 10,000 ammonia storage tanks.[3] Projected increases from announced ammonia projects would grow ammonia ports by 50% by 2030 and 100% by 2040. Moreover, there is an opportunity to convert current liquified natural gas (LNG) receiving terminals and storage facilities to ammonia storage.[4] The materials and metallurgy for converting LNG storage to ammonia are compatible, helping to mitigate or avoid fossil fuel infrastructure lock in.

Adapted and developed to store liquid ammonia, liquid terminals will continue to have an integral role in helping broaden ammonia’s use as a low-carbon energy source and in the acceleration of decarbonization within the energy transition.