Nakilat to seize business opportunities in global ammonia transportation market

Nakilat is exploring options in tapping the emerging large-scale ammonia sea transportation market as part of strengthening its expansion strategy.

The ammonia market is expected to grow rapidly, driven by several green and blue ammonia production projects announced in the Middle East and other regions.

"We are closely monitoring these developments to seize the potential business opportunities," Nakilat said in its latest internal magazine Voyages.

"Future use of ammonia as a hydrogen carrier will drive ammonia market expansion and commissioning of new production projects. This will necessitate employment of specialised large-scale ammonia gas carriers to support international trade," Nakilat said.

In January 2024, Nakilat placed an order with Hyundai Samho Heavy Industries (HSHI) for two LNG (liquefied natural gas) carriers and four very large LPG (liquefied petroleum gas/ammonia carriers (VLGC or very large gas carriers/VLAC or very large ammonia carriers) as part of its international fleet diversification and expansion programme.

"The new VLAC vessels will expand the company’s presence in the growing LPG trade and emerging large-scale ammonia seaborne transportation market," it said.

Highlighting that ammonia emerges as one of the low-carbon fuel with transformative (potential provided using renewable energy); it said global demand is expected to increase to 688mn tonnes by 2050 from 183mn tonnes in 2020.

More than half of currently available ammonia is produced in China, the US, India and Russia, using hydrogen formed from natural gas and coal, then combined with nitrogen separated from the air using electricity, the Voyages said.

Adding these new vessels will further enhance its presence in the international shipping market and demonstrate the company’s technical and commercial capabilities.

These carriers are slated to be deployed in major projects with leading energy companies, leveraging the strong growth of LNG trade worldwide.

Nakilat secured 25 conventional and nine QC-Max new build LNG carriers from QatarEnergy through a highly competitive international tender for the historic LNG fleet expansion programme under the North Field East (NFE) project.

These vessels will be built at shipyards in South Korea and China, supervised by Nakilat’s site team, and will be employed on long-term contracts with QatarEnergy.

"This ensures the safe delivery of LNG worldwide and provides stable, long-term income for our company," Nakilat said.

Nakilat currently operates four modern LNG carriers and four LPG carriers (VLGCs), which are chartered to international clients and trade globally.

Nakilat has undertaken 368 cargoes of LNG through its 69 LNG carriers delivering 28.32mn tonnes and 11 cargoes of LPG through is four LPG vessels delivering 0.47mn tonnes in the first half of this year.