Engineering firm ABB has signed a term sheet with SwitcH2 to provide automation and electrification solutions for its offshore ammonia production unit.

The floating production, storage and offloading (FPSO) unit is planned to be stationed off Portugal, ABB said in an emailed statement on Wednesday.

It will feature a 300 MW electrolyser capable of producing up to 243,000 mt of green ammonia per year.

The FPSO will use renewable electricity and seawater to produce hydrogen using electrolysis, which will then be combined with nitrogen extracted from the air to produce green ammonia.

“It will then be transferred to carrier ships via a floating hose system for transport to ports where it can be used as a marine fuel or cracked back to hydrogen for industrial use,” ABB said.

Front-end engineering and design work of the FPSO is expected to continue until mid-2026, with a final investment decision due by the third quarter of 2026.