A memorandum of understanding (MoU) for the delivery of renewable ammonia to ACE Terminal, headquartered in the Port of Rotterdam, has been signed with Cepsa.
According to the MoU, Cepsa will send renewable ammonia to the ACE Terminal in Rotterdam for use in industrial applications once it is converted back into hydrogen or for use as ammonia itself.
According to Cepsa, the firm is investing €3 billion in the development of 2GW of renewable hydrogen production capacity at its two Energy Parks in Andalusia, southern Spain. According to Cepsa, the project’s timeframe, which calls for the ACE Terminal to be operational in 2026, aligns with the prediction that the first renewable hydrogen exports will start in 2027.
The ammonia made at Cepsa’s San Roque Energy Park, which is close to the Bay of Algeciras, will be exported. The first MoU for the project is the ACE Terminal, which will be built by Gasunie, HES International, and VOPAK. It will be situated at Maasvlakte in the Port of Rotterdam.
According to ICIS data, the ammonia-to-hydrogen assessment for northwest Europe was at €6.83/kg on February 16th, which was the lowest level since late October 2021 but was still about €3/kg more expensive than unrestricted and low-carbon hydrogen production techniques based on front month spot gas and power assessments.
Nonetheless, it has been demonstrated that ammonia to hydrogen may compete with domestic production. Production expenses for hydrogen derived from spot ammonia volumes were determined to be less expensive than domestic production costs during the summer of 2022 amid record European gas prices. Research demonstrated that importing ammonia and having it break down into hydrogen was economical on both a project breakeven basis and a variable cost basis during times of commodity scarcity in European energy markets.