South African petrochemical firm Sasol on Friday said it was partnering with Japan's Itochu Corp to explore the development of green hydrogen and green ammonia projects for shipping fuel and power generation.

Sasol is currently the world's biggest producer of fuel products and chemicals from coal, but is transitioning away from the fossil fuel as part of its decarbonisation plan.

Green hydrogen, produced from splitting water into hydrogen and oxygen using renewable energy sources such as solar and wind, has been touted as a key carbon-free energy source for power generation, shipping fuel and fertilizer manufacturing.

Sasol said green ammonia, produced from green hydrogen, is also a key enabler of net-zero fertilizer manufacturing, and can be used as a zero-carbon bunkering fuel in the marine sector and for co-firing in thermal power generation.

"Green ammonia is an excellent energy carrier, especially over long-distances, and can be easily transported," it added. "The product can also be 'cracked' back to hydrogen gas for further applications."

The two firms signed a memorandum of understanding during the Tokyo International Conference on African Development (TICAD 8) held in Tunisia on Aug. 27 and 28, Sasol said in a statement.

"This marks yet another milestone in our ambition to lead the energy transition in South Africa through decarbonisation, while stimulating industrial development," said Priscillah Mabelane, Sasol's executive vice president for energy.

Japanese conglomerate Itochu has been exploring the development of green hydrogen as a fuel in the marine sector and for power generation, Sasol said.

(Reporting by Nelson Banya; Editing by Jan Harvey)