Marubeni signs long-term offtake deal for green ammonia produced in China

Marubeni has signed its first long-term offtake agree-ment for green ammonia with green technology firm Envision Energy Co. in Inner Mongolia, China, said the company.

Envision is currently developing a commercial-scale green hydrogen-ammonia plant, fully powered by green electricity. The initial production phase, launched early last year, targets a production capacity of 300,000 t/y of green ammonia, with plans to scale up to a total capaci-ty of 1.5-million t/y upon completion.

Marubeni has agreed to offtake an undisclosed vol-ume of the green ammonia and will supply it to cus-tomers in various industries, including chemicals, ferti-lizers and clean energy.

We remind, Exxon Mobil has signed a long-term agreement to supply 250,000 tons of low-carbon ammonia annually to Japanese trading company Marubeni, the U.S. oil producer said Wednesday, representing Exxon's first customer signing for its plan to build a hydrogen chemical plant in Baytown, Texas. The agreement is a step forward in Exxon's efforts to build the world's largest low-carbon hydrogen plant at its Baytown oil complex.

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Despite bullish crude values, propylene prices remained constant in Asia on Thursday, as per Polymerupdate.

An industry source in Asia on condition of anonymity informed a Polymerupdate team member, "Prices held stable as buying interest remained muted in the Asian region."

On Thursday, FOB Korea propylene prices were assessed at the USD 740-750/mt levels, steady from Wednesday?s assessed levels.

Meanwhile, CFR China propylene prices on Thursday were assessed at the USD 770-780/mt levels, constant day on day.

In plant news, Sinopec Tianjin Co has restarted its No.3 Polypropylene (PP) unit on June 3, 2025 following a turnaround. The unit was shut for maintenance on April 17, 2024. Located in Tianjin, China, the No.3 unit has a production capacity of 200,000 mt/year.

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Kazakhstan has started to build a plant in the Atyrau region to fractionate liquefied petroleum gas (LPG) from the Kashagan field, the Energy Ministry said, as per Interfax.

"The plant is scheduled for commissioning in early 2026, with full production capacity reached in 2027. Production of up to 700,000 tonnes of liquefied petroleum gas per year is planned at the plant," the ministry told Interfax.

The state-owned Qazqaz is building the plant. The first batch of gas should be supplied to the domestic market in December 2025, the ministry said. Currently, zero-cycle work is underway: laying foundations for equipment and constructing buildings and infrastructure.

The project is being implemented within the framework of agreements between the Energy Ministry and the contracting companies of the North Caspian Project under the production sharing agreement. In 2024, a liquefied petroleum gas sales and purchase agreement was signed by QazaqGaz JSC and the Kashagan field operator, North Caspian Operating Company (NCOC) LLP, and the project roadmap was approved.

"The project is aimed at ensuring stable supplies of LPG to the domestic market and reducing the deficit of gas motor fuel," the Energy Ministry said.

Kashagan is considered one of the world's largest oil fields discovered in recent decades. Its recoverable reserves range from 9 billion to 13 billion barrels of oil. Commercial production at Kashagan began in the fall of 2016.

The shareholders of the NCOC consortium are: KMG Kashagan B.V. (16.877%); Shell (SPB: RDS.A) Kazakhstan Development B.V. (16.807%); Total EP Kazakhstan (16.807%); Agip Caspian Sea B.V. (16.807%); ExxonMobil Kazakhstan Inc. (16.807%); CNPC Kazakhstan B.V. (8.333%); Inpex North Caspian Sea Ltd. (7.563%).

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Neither Energy Transfer LP (Houston) nor Enterprise Products Partners LP (Houston) will be allowed to load ethane for shipment to China without receiving a license from the Bureau of Industry and Security (BIS), part of the US Department of Commerce, a sper Chemweek.

Energy Transfer received the news by letter on June 3, according to a Form 8-K filed on June 4. The company said it plans to apply for an emergency authorization to continue exports while its license application is being processed, but the prospects are not good. Enterprise, which was notified of the license requirement on May 23, said on June 4 that it has been informed by the BIS that its own request for emergency authorization will be denied.

US Gulf Coast ethane prices slumped in the wake of the news. Platts assessed ethane at the Enterprise terminal in Mont Belvieu, Texas, at 18.75 cents/gal on June 4, down 2.875 cents on the day and the lowest price since the 18.25 cents/gal of Nov. 8, 2024.

Enterprise said it had requested emergency authorization for three cargoes totaling about 2.2 million barrels of ethane. The company also noted that butane exports have been dropped from the license requirement.

Ethane is used almost entirely as a feedstock for the production of ethylene.

Enterprise and Energy Transfer are the only companies with ethane export terminals in the US. Enterprise operates an ethane export terminal at its Morgan’s Point facility in Pasadena, Texas. Energy Transfer has terminals in Marcus Hook, Pennsylvania, and in Nederland, Texas. The Nederland terminal, Orbit Gulf Coast NGL Exports, is a joint venture with Chinese petrochemical producer Zhejiang Satellite Petrochemical.

The 11-day delay in the BIS’s letter to Energy Transfer was a boon to Satellite, which has two 1.25 million metric tons per year ethylene plants at Lianyungang, China.

The Very Large Ethane Carrier (VLEC) Gas Jessamine, which arrived at the Orbit terminal on May 22, departed on May 23 with a cargo of ethane bound for Lianyungang, according to Commodities at Sea by S&P Global Commodity Insights. VLEC Seri Elbert arrived at Orbit on May 26 and departed for Lianyungang on May 28. Both vessels are currently in transit across the Pacific Ocean.

VLEC Pacific Ineos Grenadier arrived at Enterprise’s Morgan’s Point terminal in Pasadena, Texas, on May 23 to take on ethane for shipment to Ningbo, China, but the vessel remained moored there as of June 4, according to data from Commodities at Sea.

BIS has not issued any public statements regarding the new license requirement, and it has not responded to queries from Chemical Week. The existence of the license requirement came to light through a Form 8-K filed by Enterprise on May 29. According to Enterprise, BIS had determined that exports of ethane “pose an unacceptable risk of use in or diversion to a ‘military end use’ in China or for a Chinese ‘military end user,’ with a specific concern for their use in China’s military-civil fusion strategy.”

According to the US Energy Information Administration, the US exported 2.8 million barrels per day (bpd) of ethane in 2024, of which 492,000 bpd was shipped to China. As of the end of 2024, China had installed about 6 MMt/y of ethane-based ethylene capacity, according to estimates by S&P Global Commodity Insights.

A 1 million metric tons per year (MMt/y) ethylene plant requires about 62,000 bpd of ethane.

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Russia's gas consumption grew 5.2% from 495.6 billion cubic meters in 2023 to 521.5 bcm in 2024, Gazprom said in an annual report, as per Interfax.

"Gas consumption rose as weather conditions in the winter months of 2024 were relatively cold compared to the previous year. The main contributors to the growth were electricity companies and the oil industry, the housing and utilities sector and households. There was also growth in agriculture, largely thanks to the completion of regional gasification and further gasification programs," the company said.

The data provided by Gazprom for 2024 coincide with preliminary data from the Energy Ministry, which reported that Russia had consumed 500 bcm of gas in 2023. Energy Minister Sergei Tsivilev said that this had grown 4.3% last year to 521.5 bcm.

This significantly exceeded the IEA's forecast of 517 bcm. Gazprom also said that 262 billion rubles, including VAT, had been invested in building gas pipelines, distribution stations and branch pipelines between and within localities as well as further gasification in 2024.

Gazprom also spent 38.6 billion rubles, including VAT, in the construction and reconstruction of gas distribution stations and branch pipelines as part of the Capital Construction Plan from its investment program in 2024. This resulted in the completion of five gas distribution stations and branch pipelines spanning 243.2 km in total.

The company said of the global gas market that Asia-Pacific Region countries had increased gas consumption by 6.3% or more than 55 bcm in 2024. "China is traditionally the main driver of growth: Its gas consumption rose 8% or by 32 bcm in 2024 due to increased electricity production and demand for liquefied natural gas as freight transport fuel," Gazprom said.

"One important event of 2024 was China's adoption of the Natural Gas Management and Usage Methods policy document, which replaced the Natural Gas Usage Policy in effect from 2012. According to the document, the role of gas in China's energy mix will increase and will also become instrumental in achieving climate targets. The Energy Law, passed in November 2024, describes goals and tasks for the development of China's power grid and defines the responsibility of state authorities for planning and forecasting the industry's development," the report reads.

In order to ensure its energy security, China is expected to ramp up hydrocarbon exploration and development in the oil and natural gas sector. Gazprom said that demand for gas in India had risen 10.2% or by 7 bcm in 2024.

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