Lotte Fine Chemical Signs Korea's First Green Ammonia Power Supply Deal

• Lotte Fine Chemical signed Korea's first green ammonia power deal for 1,500 tonnes from 2027
• Amun Energy will consume ammonia at a 1 MW demonstration plant with 40 MW expansion planned
• About 21 percent of merchant ammonia trade normally passes through the Strait of Hormuz
• Four of five Bangladeshi urea plants were shut since March 2026 for lack of LNG feedstock
• Nutrien kept its Trinidad Point Lisas 85,000 tonne per month ammonia site indefinitely closed

Global ammonia markets moved through the second and third weeks of October 2026 with two policy and infrastructure stories at the forefront, as South Korea secured a landmark green ammonia power supply agreement and global analysts warned that continued Strait of Hormuz disruption could put 21 percent of merchant ammonia trade at risk. On October 15, Lotte Fine Chemical signed Korea's first green ammonia power deal, agreeing to supply 1,500 tonnes over one year beginning in 2027 to Amun Energy, a joint venture of GS E&C and Amogy. The ammonia will feed a 1 MW demonstration ammonia fueled distributed power plant in the Yeongil Bay industrial complex in Pohang, with commercial operation planned for 2028 and expansion to as much as 40 MW over time.

The Korean deal gave Lotte Fine Chemical priority negotiation rights for future supply growth. The producer currently handles about 700,000 tonnes of ammonia a year, the third largest single company volume worldwide, and owns Asia's largest ammonia storage tank at Ulsan. Lotte first imported green ammonia in March 2026 and began green ammonia bunkering operations for ships from the port of Ulsan in April. The new offtake agreement signaled a widening of low carbon ammonia buyers beyond fertilizer and marine fuel into power generation.

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The second major event centered on Middle East shipping. A high level global energy and food security analysis released on October 19 warned that about 29 percent of global urea trade and 21 percent of merchant ammonia normally pass through the Strait of Hormuz, along with nearly half of all seaborne sulfur. The report noted that liquefied natural gas supply through the strait underpins about 85 percent of India's domestic urea output, and that four of the five urea plants in Bangladesh had already shut since March 2026 for lack of LNG feedstock.

The crude to diesel spread, historically running at 12 to 20 dollars per barrel, topped 100 dollars in early September and remained elevated through the first half of October. The analysis warned that farmers in exposed regions might cut fertilizer application rates or plant less, with the impact on global food prices likely to lag into 2027. A United Nations backed Hormuz fertilizer protection mechanism remained in waiting as the United States and Iran had not yet approved its operational terms. Earlier in October, Nutrien confirmed that its Point Lisas site in Trinidad, which produced about 85,000 tonnes per month of ammonia and 55,000 tonnes per month of urea, would stay shut indefinitely because of natural gas supply constraints.

For procurement teams in fertilizer blending, urea manufacturing, marine fuel, and specialty chemical supply chains, the near term action is to secure November and December ammonia coverage before Hormuz risk pushes landed values higher. Fertilizer coop and state buyers in India, Bangladesh, and West Africa should confirm bilateral tenders with Middle East suppliers while shipping routes remain operational. Power generation and marine fuel buyers of low carbon ammonia should track South Korean and Japanese offtake announcements, as the Korean deal is set to be followed by larger allocations through 2028.