Aker Horizons and VNG ink LOI to ship ammonia from Norway to Germany

Norway-based green energy developer Aker Horizons and German gas group VNG have signed a letter of intent (LOI) aiming to ship green ammonia from Narvik, Northern Norway, to Germany.

VNG said it plans to procure up to 200,000 tonnes of green ammonia per year from Aker Horizons’ large-scale green industrial hub under development in Narvik as of 2028. The green ammonia will be shipped from Narvik to terminals in Germany, where VNG will distribute it further as ammonia or hydrogen to its customers, who will use it to decarbonise their operations.

The LOI is a first step towards a firm supply agreement between the parties and could be expanded to further areas of collaboration.  

The agreement was signed in Berlin during a visit by Norway’s Minister of Trade, Industry and Fisheries Jan Christian Vestre to German Vice-Chancellor Robert Habeck.

The partnership between Aker Horizons and VNG supports Norway’s commitment to become a key supplier of clean hydrogen to Germany and the European Union (EU), helping foster new green industrial development and strengthening European energy security, the parties stated.

“The Narvik project is an important milestone in the development of industrial-scale production of green hydrogen and green ammonia in Europe, and we are pleased to be joined on this journey by an established industry player such as VNG,” said Kristian Røkke, CEO of Aker Horizons.

“Achieving a fully-decarbonised energy system requires close collaboration between governments, local authorities, regulators, investors, and industry. Through this collaboration, Aker Horizons and VNG will accelerate the ramping up of the hydrogen economy in line with German and EU ambitions, supporting the decarbonisation of hard-to-abate industries.”

“Norway has been a stable and trustworthy energy supplier for VNG for many years and will remain so in the future. We are pleased that the Letter of intent signed today will be the foundation for future cooperation with Aker Horizons and at the same time strengthen the energy relationship with Norway. VNG and Aker Horizons have complementary skills, strengths and know-how, providing a solid foundation to develop green business models,” Ulf Heitmüller, CEO of VNG, explained. 

“Our goal is to drive decarbonisation in eastern Germany, especially in industry. The purchase of green ammonia from the Narvik project might be an important step along the way.”

In January 2023, Norway and Germany reaffirmed their joint intention to ensure a large-scale supply of hydrogen by 2030 and to establish the necessary infrastructure from Norway to Germany.

Germany estimates the country will need up to 130 terawatt hours (TWh) of hydrogen by 2030, including derivatives such as ammonia, methanol or synthetic fuels, of which 40-75 TWh would be made from renewable electricity, i.e. green hydrogen. 50-70% of Germany’s hydrogen needs are expected to be covered through imports. Until 2030, Germany will be prioritizing its industrial sectors for the use of hydrogen.