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A unit of Hive Energy Corp. said a group led by Japanese trading house Itochu Corp. was nearing an agreement to buy green ammonia from a project in South Africa.
Hive Hydrogen South Africa will produce green ammonia, which can be used as fuel in heavy industry and power plants, as well as in fertilizers and cleaning products, at a $5.9 billion (R108 billion) facility at South Africa's Coega Port. It is possible to start from. 2029.
Colin Lobser, general manager of Hive Hydrogen South Africa, said in an interview that a deal with the Itochu-led group “hasn't happened yet” but the parties were “very interested in what the offtake agreement would look like”. said he knew. He declined to identify other participants in the group, citing confidentiality.
In the nascent green hydrogen industry, securing offtake agreements, most of which are unsigned, can improve project viability and make them more attractive to financiers and investors.
An Itochu spokesperson said talks over the offtake agreement were still ongoing.
Such an agreement would boost the prospects of this megaproject, putting it ahead of many other plans to produce green fuels in southern Africa, leveraging the region's rich renewable power resources and linking Namibia and This will give momentum to the South African government's plans. To develop industry.
In neighboring Namibia, Enertrag SE is supporting the €10 billion ($10.8 billion) Hyphen project. Compagnie Maritime Belge SA is building a small hydrogen plant there and plans a $3.5 billion ammonia facility.
Hive Hydrogen, which is 75% owned by Britain's Hive Energy, plans to sell the fuel it produces to East Asia, with initial production currently scheduled for the second quarter of 2029.
Green hydrogen is produced by burning and using renewable energy to split water without producing the greenhouse gases that cause climate warming. It can then be converted to ammonia. Ammonia is easier to transport, has a higher energy density than hydrogen, and does not require cooling to extreme temperatures.
The fuel is seen as a potential way to decarbonise shipping and heavy industry, and could also be used to generate thermal power in power plants. It currently costs more to produce than other fuels, such as diesel or so-called blue hydrogen made from natural gas, but costs could come down as technology advances and regulators impose penalties on the use of fossil fuels.
South Africa has ambitious plans to develop an ammonia plant, hydrogen ports and pipelines, and hydrogen- or ammonia-fired steel facilities. Part of the $9.3 billion climate finance deal with some of the world's richest countries, known as the Just Energy Transition Partnership, is aimed at helping the industry grow. Hive Hydrogen is 25% owned by South Africa's Built Africa Group, but Lobser said he hoped to eventually own about 10% of the project.
Itochu signed a memorandum of understanding to develop the factory last year, and may acquire a 25% stake with a partner company, Lobser said. Other potential investors include two oil majors and a major fund, he added.
He said the company plans to allocate $420 million in equity to communities near the plant, of which $160 million has already been secured. Once completed, the first phase of Hive Hydrogen is expected to produce approximately 900,000 tonnes of green ammonia per year. This facility requires the installation of 3.5 gigawatts of renewable power capacity.
