Energy

China's GCL plans Ethiopian ammonia plant and hydrogen facilities

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BEIJING, July 29 (Reuters) - Chinese solar panel maker GCL Group plans a plant in Ethiopia to make ammonia using the natural gas produced from fields it has been developing under a deal with the local government, the company said on Thursday.

GCL, which is diversifying its business by exploring new energy sources, will also set up facilities with the capacity to turn the ammonia into some 2.5 million tonnes of liquid hydrogen, its founder said.

The company's plans envisage a 4 million tonnes per annum ammonia factory in Djibouti, whose output would be shipped elsewhere to be used to make the liquid hydrogen.

Such a process has green credentials because ammonia is easier to store and transport than hydrogen, while the latter gas is a contender in some applications as an energy source.

GCL sealed a deal with the Ethiopian government in 2013 to develop two gas fields, Calub and Hilala, and to carry out exploration at eight blocks.

The fields are expected to churn out 3.5 billion cubic metres of natural gas per year in the first phase, which would ultimately support the production of 10 million tonnes of hydrogen per annum for 40 years, GCL said.

GCL did not disclose the investment or timeframe of the Ethiopian project, but said it planned for production of liquid hydrogen to reach 700,000 tonnes in the first phase.

"We are re-locating ourselves and focusing on a new racing track," said GCL Chairman Zhu Gongshan at the sidelines of a launching ceremony of the hydrogen project on Thursday.

GCL, one of China's biggest polycrystalline producers, solar products manufacturers and once a major solar power station operator, started the sale of its solar station assets in 2018 and expects the process to complete by early next year.

"The deals of selling solar stations are expected to complete by the first quarter in 2022, and then we will focus on the hydrogen business," said Zhu.

The hydrogen projects would be handled by GCL's subsidiary, GCL New Energy Holdings (0451.HK).

GCL also plans to build 400,000 tonnes of hydrogen production capacity from renewable power sources, mainly solar power stations in northwestern China, by 2025.

It aims to supply the hydrogen to industrial users, especially steel mills, in northeast Asia.

"Our hydrogen prices would be very competitive in the market, so we are not worrying about demand," said Zhu, adding that GCL looks to facilitate the energy transition at China's steel mills from burning coal to using hydrogen.

Top Chinese steel mills, such as China Baowu Group, HBIS and Jiuquan Iron & Steel, are exploring hydrogen in steelmaking to help meet China's climate targets.

Reporting by Muyu Xu and Shivani Singh Editing by Jason Neely and David Holmes

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