Norwegian fertiliser giant Yara has signed a binding offtake agreement with Indian developer ACME Group for 100,000 tonnes of renewable ammonia a year from a project in Oman.

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The two firms had previously signed non-binding term sheets in July 2022 for full offtake from the first phase of the unnamed project, which will have 300MW electrolyser capacity powered by 500MW of solar and start up in 2027.

“We have had a number of firsts to our credit in this sector and with the signing of this contract, we aim to become the world’s first large-scale producer of green ammonia,” said Ashwani Dudeja, director of green hydrogen and ammonia at ACME.

The developer plans to further scale up the plant to produce 900,000 tonnes of renewable NH3 per year.

However, Yara and ACME have remained coy about some of the details of the project, including the length of the agreement and the price struck.

While Houston-based KBR had been selected to supply the ammonia synthesis technology in 2021, the manufacturer of the project’s electrolyser or solar panels has not yet been disclosed.

Yara has hinted that the ammonia it has agreed to buy may not go into its own fertiliser manufacturing operations, but rather be sold on to a range of different markets.

“Yara Clean Ammonia is a frontrunner in enabling the hydrogen economy across the shipping, food, power, and industrial sectors,” says Magnus Ankarstrand, president of the business unit, which last July saw a planned IPO postponed by one to two years due to weak valuation.

“The renewable ammonia from Oman will be part of our scalable distribution system, developing a reliable, safe, and cost-efficient supply chain for low emission ammonia across different market segments.”

While the project will be located in Duqm special economic zone, ACME had secured land in 2021 through the government’s Public Authority for Special Economic Zones and Free Zones, rather than the country’s Hydrom green hydrogen auction process.

The developer had in July last year also secured a 40 billion rupee ($488m) loan from India’s state-backed infrastructure bank REC, allowing it to start construction on the facility.

The project has already been certified by TÜV Rheinland as producing hydrogen exclusively from renewable electricity, with “carbon neutral” ammonia synthesis, and on start-up, aims to produce H2 that meets the definition of a renewable fuel of non-biological origin (RFNBO) set out by the EU.