Aker — Regulatory Filings 2021

Feb 18, 2021

Aker ASA: Aker Horizons partners with Yara and Statkraft to establish Europe's first large-scale green ammonia project in Norway

Aker ASA: Aker Horizons partners with Yara and Statkraft to establish Europe's first large-scale green ammonia project in Norway

Aker Horizons AS ("Aker Horizons") announced today that it has signed a Letter

of Intent with Statkraft AS ("Statkraft") and Yara International ASA ("Yara")

aiming to establish Europe's first industrial-scale green ammonia project in

Norway, enable the hydrogen economy, and accelerate the energy transition. The

first project in the partnership will be to electrify Yara's existing ammonia

facility in Porsgrunn, which has the potential to be one of the largest climate

initiatives in Norwegian industrial history. The partners will further target

green hydrogen and green ammonia opportunities within shipping, agriculture and

industrial applications.

"Aker has been a driving force for knowledge-based industrial development for

180 years. A partnership with Yara and Statkraft, two fellow Norwegian

industrial pioneers, marks the beginning of a new industrial adventure in

Norway.  The first project in Porsgrunn can be a lighthouse project - providing

competitive advantage in a growing global hydrogen economy, building on existing

capabilities in the Norwegian supplier industry to create new jobs for the

future, and forming the basis for a future Norwegian export industry," says

Øyvind Eriksen, President & CEO of Aker ASA and Chairman of Aker Horizons.

The first project in the equal partnership is for electrification and

decarbonization of Yara's ammonia production at Herøya in Porsgrunn, one of the

largest sources of onshore CO2 emissions in Norway. The project has the

potential to reduce CO2 emissions equivalent to the annual emissions from more

than 300,000 fossil fuel passenger cars. Provided that power is available at the

site and the required co-funding is secured, the project could be realized

within 5-7 years.

"This is not just a unique decarbonization project, but a strategic investment

that can establish new value chains for green hydrogen and green ammonia. Yara

is a world leader in ammonia, with long experience and leading position within

global ammonia production, logistics and trade. With Statkraft and Aker Horizons

onboard we gain key expertise within renewable electricity, power markets,

industrial development and project execution, giving us a unique opportunity to

realize the project," says Svein Tore Holsether, President and CEO of Yara.

Aker Horizons, Aker's listed investment company within renewables and green

technology, will carry out the project through its wholly owned subsidiary, Aker

Clean Hydrogen, a new Aker Horizons' company established to design, build, own

and operate major hydrogen facilities globally. Like the rest of the Aker

Horizons' portfolio, Aker Clean Hydrogen will leverage the deep domain expertise

across the Aker ecosystem, including within system integration, software and

technology and project execution, to build and operate the project as

efficiently as possible.

The conversion of Yara's ammonia plant provides a unique opportunity to leverage

Norway's existing supplier industry and build new knowledge and competency for a

global market. In addition to the Porsgrunn project, the three companies will

explore the potential for green ammonia production in Northern Norway to

leverage existing local competency and accelerate the transition for energy

-intensive industries, including shipping and agriculture.

"Statkraft is Europe's largest producer of renewable energy. Norway's rich

renewable energy resources are one of our most important competitive advantages.

This project paves the way for new industrial development, and can at the same

time give Norway's important maritime sector a new competitive advantage, namely

access to an efficient and emission-free energy source on a large scale, " says

Statkraft CEO Christian Rynning-Tønnesen.

Shipping currently accounts for 2 percent of global GHG emissions, of which long

-distance shipping represents 80 percent. Converting all long-distance shipping

to ammonia would require approximately 500-600 tons of ammonia annually, 3-4

times current world production levels. The Norwegian shipping industry has a

stated ambition to reduce emissions from domestic shipping by 50 percent by

2030, which will require significant green hydrogen production.

"It is currently more expensive to produce green hydrogen based on renewable

electricity and electrolysis than through natural gas, but large-scale

production will reduce cost of the electrolysis route. For hydrogen to be

exported or used in long-haul shipping or fertilizer production, it needs to be

converted to ammonia, and converting Yara's existing ammonia plant is both

faster and more cost-effective than building a new plant. However, realizing

this innovative project will require good incentive frameworks and support from

the authorities," says Holsether.

Yara's Porsgrunn plant is well set up for large-scale production and export,

allowing Norway to quickly play a role in the hydrogen economy. Constructing a

new ammonia plant and associated infrastructure is typically a capital-intensive

process, but by utilizing Yara's existing ammonia plant and associated

infrastructure in Porsgrunn, valued at USD 450 million, the total capital

requirement for the project is significantly reduced compared with alternative

greenfield locations.

"The Norwegian process industry and cornerstone companies in local communities

are dependent on restructurings to secure and create new jobs. The Herøya

project will be a starting point for further electrification of Norwegian

industry and realization of hydrogen as an energy carrier. This forms the basis

for a new export industry built on unique competency and expertise already in

high demand in Europe and other global markets," says Eriksen. "Not unlike the

impact Ekofisk and other fields had on the development of the Norwegian oil and

gas industry in the 1970s and 80s, the hydrogen project at Herøya could have

major ripple effects for the development of the entire hydrogen value chain and

supplier industry in Norway."

Ammonia's chemical properties make it ideally suited for the hydrogen economy.

It does not need to be refrigerated to the same temperatures as hydrogen, and

has a higher energy density than liquid hydrogen, making it more efficient to

transport and store. Ammonia is therefore the most promising hydrogen carrier

and zero-carbon shipping fuel.

Yara, Statkraft and Aker will host a press conference today, Thursday, February

18, at 10:00 CET. The press conference will be held in Norwegian and can be

followed live at https://www.yara.com/news-and-media/green-ammonia-project-press

-conference/

Aker Horizons will host a presentation about Aker Clean Hydrogen and its

ambitions in the global hydrogen market on Friday, February 19 at 11:00 CET.

-ENDS-

For more information, please contact:

Atle Kigen, Head of Corporate Communications, Aker ASA

Tel: +47 90784878

Email: atle.kigen@akerasa.com

Christina Chappell Glenn, Head of Investor Relations, Aker ASA

Tel: +47 90532774

Email: christina.glenn@akerasa.com

This information is subject of the disclosure requirements pursuant to section 5

-12 of the Norwegian Securities Trading Act.