Aker ASA: Aker Horizons partners with Yara and Statkraft to establish Europe's first large scale green ammonia project in Norway

OSLO, Norway, Feb. 18, 2021 /PRNewswire/ -- Aker Horizons AS ("Aker Horizons") announced today that it has signed a Letter of Intent with Statkraft AS ("Statkraft") and Yara International ASA ("Yara") aiming to establish Europe's first industrial-scale green ammonia project in Norway, enable the hydrogen economy, and accelerate the energy transition. The first project in the partnership will be to electrify Yara's existing ammonia facility in Porsgrunn, which has the potential to be one of the largest climate initiatives in Norwegian industrial history. The partners will further target green hydrogen and green ammonia opportunities within shipping, agriculture and industrial applications.

"Aker has been a driving force for knowledge-based industrial development for 180 years. A partnership with Yara and Statkraft, two fellow Norwegian industrial pioneers, marks the beginning of a new industrial adventure in Norway.  The first project in Porsgrunn can be a lighthouse project - providing competitive advantage in a growing global hydrogen economy, building on existing capabilities in the Norwegian supplier industry to create new jobs for the future, and forming the basis for a future Norwegian export industry," says Øyvind Eriksen, President & CEO of Aker ASA and Chairman of Aker Horizons.

The first project in the equal partnership is for electrification and decarbonization of Yara's ammonia production at Herøya in Porsgrunn, one of the largest sources of onshore CO2 emissions in Norway. The project has the potential to reduce CO2 emissions equivalent to the annual emissions from more than 300,000 fossil fuel passenger cars. Provided that power is available at the site and the required co-funding is secured, the project could be realized within 5-7 years.

"This is not just a unique decarbonization project, but a strategic investment that can establish new value chains for green hydrogen and green ammonia. Yara is a world leader in ammonia, with long experience and leading position within global ammonia production, logistics and trade. With Statkraft and Aker Horizons onboard we gain key expertise within renewable electricity, power markets, industrial development and project execution, giving us a unique opportunity to realize the project," says Svein Tore Holsether, President and CEO of Yara.

Aker Horizons, Aker's listed investment company within renewables and green technology, will carry out the project through its wholly owned subsidiary, Aker Clean Hydrogen, a new Aker Horizons' company established to design, build, own and operate major hydrogen facilities globally. Like the rest of the Aker Horizons' portfolio, Aker Clean Hydrogen will leverage the deep domain expertise across the Aker ecosystem, including within system integration, software and technology and project execution, to build and operate the project as efficiently as possible.

The conversion of Yara's ammonia plant provides a unique opportunity to leverage Norway's existing supplier industry and build new knowledge and competency for a global market. In addition to the Porsgrunn project, the three companies will explore the potential for green ammonia production in Northern Norway to leverage existing local competency and accelerate the transition for energy-intensive industries, including shipping and agriculture.   

"Statkraft is Europe's largest producer of renewable energy. Norway's rich renewable energy resources are one of our most important competitive advantages. This project paves the way for new industrial development, and can at the same time give Norway's important maritime sector a new competitive advantage, namely access to an efficient and emission-free energy source on a large scale, " says Statkraft CEO Christian Rynning-Tønnesen.

Shipping currently accounts for 2 percent of global GHG emissions, of which long-distance shipping represents 80 percent. Converting all long-distance shipping to ammonia would require approximately 500-600 tons of ammonia annually, 3-4 times current world production levels. The Norwegian shipping industry has a stated ambition to reduce emissions from domestic shipping by 50 percent by 2030, which will require significant green hydrogen production.  

"It is currently more expensive to produce green hydrogen based on renewable electricity and electrolysis than through natural gas, but large-scale production will reduce cost of the electrolysis route. For hydrogen to be exported or used in long-haul shipping or fertilizer production, it needs to be converted to ammonia, and converting Yara's existing ammonia plant is both faster and more cost-effective than building a new plant. However, realizing this innovative project will require good incentive frameworks and support from the authorities," says Holsether.

Yara's Porsgrunn plant is well set up for large-scale production and export, allowing Norway to quickly play a role in the hydrogen economy. Constructing a new ammonia plant and associated infrastructure is typically a capital-intensive process, but by utilizing Yara's existing ammonia plant and associated infrastructure in Porsgrunn, valued at USD 450 million, the total capital requirement for the project is significantly reduced compared with alternative greenfield locations.

"The Norwegian process industry and cornerstone companies in local communities are dependent on restructurings to secure and create new jobs. The Herøya project will be a starting point for further electrification of Norwegian industry and realization of hydrogen as an energy carrier. This forms the basis for a new export industry built on unique competency and expertise already in high demand in Europe and other global markets," says Eriksen. "Not unlike the impact Ekofisk and other fields had on the development of the Norwegian oil and gas industry in the 1970s and 80s, the hydrogen project at Herøya could have major ripple effects for the development of the entire hydrogen value chain and supplier industry in Norway."

Ammonia's chemical properties make it ideally suited for the hydrogen economy. It does not need to be refrigerated to the same temperatures as hydrogen, and has a higher energy density than liquid hydrogen, making it more efficient to transport and store. Ammonia is therefore the most promising hydrogen carrier and zero-carbon shipping fuel.

Yara, Statkraft and Aker will host a press conference today, Thursday, February 18, at 10:00 CET. The press conference will be held in Norwegian and can be followed live at https://www.yara.com/news-and-media/green-ammonia-project-press-conference/

Aker Horizons will host a presentation about Aker Clean Hydrogen and its ambitions in the global hydrogen market on Friday, February 19 at 11:00 CET.

For more information, please contact:

Atle Kigen, Head of Corporate Communications, Aker ASA
Tel: +47 90784878
Email: atle.kigen@akerasa.com

Christina Chappell Glenn, Head of Investor Relations, Aker ASA
Tel: +47 90532774
Email: christina.glenn@akerasa.com

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

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