US CF Industries and Mitsui announce plans for new US blue ammonia capacity
HOUSTON (ICIS)–US fertilizer producer CF Industries and global ammonia marketer Mitsui have announced their intention to jointly develop a greenfield ammonia production facility along the US Gulf Coast.
The new facility will produce blue ammonia by leveraging carbon capture and sequestration processes to reduce carbon emissions by more than 60% compared to conventional ammonia.
CF Industries will have 52% and Mitsui will have 48% ownership of the intended joint venture in which the parties will have proportional capital investment and economic returns.
CF said demand for blue ammonia is expected to grow significantly as a decarbonised energy source, both for its hydrogen content and as a fuel itself.
Under the agreement Mitsui and CF Industries have secured an exclusive right to acquire a site in the US Gulf Coast region suitable to construct an export-oriented blue ammonia production facility.
The parties are concluding selection of a technology provider for the blue ammonia production capacity.
Under the terms Mitsui will lead the marketing and distribution for the blue ammonia into Asia while CF will be responsible for plant operations and maintenance.
“Our work with Mitsui has reinforced our shared belief that blue ammonia will play a critical role in accelerating the world’s transition to clean energy and that demand for blue ammonia will grow meaningfully in the second half of this decade,” said Tony Will, CF Industries Holdings president and CEO.
“We believe that the United States offers considerable advantages for blue ammonia production due to access to plentiful and low-cost natural gas, the regulatory and legal framework in place, and the geology suitable for permanent carbon sequestration.”
The companies anticipate that a front-end engineering design (FEED) study will commence shortly, and it typically requires approximately nine to 12 months to complete.
As a result, the companies expect to make a final investment decision on constructing the blue ammonia production facility in 2023.
Construction and commissioning typically takes four years so the new project would be expected to begin production in 2027 at the earliest.
In addition, CF said it expects to produce up to 2m short tons a year of blue and green ammonia at its existing facilities beginning in 2024.
Recognising the growing demand for blue ammonia in Asia, the parties are discussing a commercial expansion of the joint venture to leverage Mitsui’s considerable marketing and distribution capabilities into that market.
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