Surge in Ammonia Carrier Vessel Orders
It is notable that orders and options for the construction of very large ammonia carrier (VLAC) vessels are mounting up in the books of Korean and Chinese shipyards. Dorian LPG is a latest LPG shipping company to announce an order. Total orders amount to more than 20, whereas no such vessels for large-scale ammonia transportation are presently sailing the oceans.
The movement of renewable energy over long distances from parts of the world with an abundant over-supply of renewable energy to places with excess energy demand is a key challenge to resolve. Hydrogen can be used as a large-scale energy ‘carrier’, where renewable electricity is converted into hydrogen using an electrolyser, transported long distance to a user market and converted back into electricity using a fuel cell process. However, the logistics for hydrogen as a gas are challenging. Hydrogen has a relatively low energy density and cryogenic solutions are potentially complex and costly at scale. Losses from electricity/ hydrogen conversions must also be taken into account.
Ammonia as a Solution for Hydrogen Transport
Ammonia is a candidate solution for the large-scale transportation of hydrogen. Whilst it is a caustic, poisonous substance, ammonia has long been used in the refining and chemicals industry and safe handling techniques are well-understood.
New transportation solutions at scale will be essential in order that the goal of green hydrogen supply at $5-8/kg closer to reality. The recent orders for ammonia VLCC ships represent an important signal to the market, because they potentially provide key enabler solutions to the adoption of hydrogen as a fuel or carrier by end users.
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