Global ammonia capacity will experience considerable growth in the next three years, increasing from 204.2 million metric tons per year (tpy) in 2013 to 249.4 million tpy by 2018, according to a new report from GlobalData.

Growth will be driven primarily by capacity additions in China, Iran, Nigeria and the US, the report states.

The report, titled Global Ammonia Outlook – Production Capacity Set to Continue Strong Growth Led by United States and Iran, states that the Asia-Pacific region will remain the largest in terms of both ammonia capacity and demand – accounting for almost half the world’s capacity by 2018.

The major end-use sectors of ammonia, such as urea and other nitrogenous fertilisers, have promising growth in the region, GlobalData affirms.

Ammonia is also used in calibration gas mixtures, among other applications, and its manufacture typically provides a low cost feedstock for carbon dioxide (CO2) production. In an interview with gasworld magazine in 2008, for example, Yara Industrial estimated that of the then installed capacity of liquid CO2 in Europe, approximately 70% was based on raw gas from ammonia production.

Regional dynamics

China’s significant influence on the Asia-Pacific region’s ammonia supply is apparent from the country’s capacity of 70.6 million tpy in 2013, accounting for almost two thirds of the region’s total capacity, according to GlobalData.

With huge feedstock reserves and strong demand, China has a favourable landscape as opposed to countries that have either demand or capacity, but not both.

GlobalData’s report also states that the Middle East and Africa will continue its impressive growth of the past decade, which saw Egypt, Iran, Qatar and Saudi Arabia increasing their ammonia capacities using natural gas. Most of the region’s capacity will target export markets in Asia, such as China and India.

Additionally, GlobalData observes that North America’s ammonia industry will receive a small boost, having suffered in the past due to high natural gas prices and declining demand from the major end-use sectors. Shale gas is now impacting the industry, with North American capacity expansion to be completely driven by the US.

May 2014 saw chemicals giant BASF and Yara confirm plans to build a joint venture world-scale ammonia plant on the US Gulf Coast, at a site in Freeport, Texas. The plant will have an annual capacity of 750,000 metric tons, and will be based on a hydrogen-synthesis process. BASF, with a strong presence in the US, is a major user of ammonia for its US downstream activities.