CF Industries, JERA, Mitsui Approve Major Ammonia Project in Louisiana

CF Industries Holdings Inc., JERA Co. Inc. and Mitsui & Co. Ltd. have reached an FID (final investment decision) to proceed with an ammonia production project with a nameplate capacity of 1.4 million metric tons per annum (MMtpa) in the state of Louisiana.

The $4 billion project, to rise in CF Industries’ Blue Point Complex in Ascension Parish, will be the biggest ammonia production facility in the world according to the partners. They aim to start production 2029.

The facility will use natural gas as feedstock. It will have a carbon dioxide dehydration and compression unit to prepare emissions captured during production for transport and sequestration. This unit is expected to prevent over 95 percent of emissions from the facility from escaping to the atmosphere according to the partners.

The partners agreed to form a joint venture (JV) in which Northbrook, Illinois-based fertilizer maker CF Industries owns 40 percent, Japanese power utility JERA 35 percent and Japanese general trading company Mitsui 25 percent, according to a joint statement Tuesday.

“JERA has a conditional option to reduce its ownership percentage that expires on December 31, 2025”, the statement said. “If the specified condition is met, JERA can reduce its ownership below 35 percent but not lower than 20 percent. CF Industries would have the right and obligation to increase its ownership by the same amount that JERA reduces”.

CF Industries has been tasked with operation and maintenance. “CF Industries will build and operate scalable infrastructure at the Blue Point site to supply the ammonia production facility with services, including product storage and loading”, the statement said.

“CF Industries will invest approximately $550 million for these facilities and receive ongoing services revenue from the joint venture ammonia production facility.

“Product offtake will be handled independently by the three companies according to their ownership percentage”.

Occidental Petroleum Corp. subsidiary 1PointFive has been tapped for the transport and sequestration of about 2.3 million metric tons a year of CO2 from the blue ammonia facility. The emissions will end up in 1PointFive’s yet-to-be-constructed Pelican Sequestration Hub in Livingston Parish, Louisiana. 1PointFive said in a separate press release its offtake contract for the Blue Point ammonia project is for 25 years.

“Our joint venture represents tangible progress towards building a reliable and affordable low-carbon ammonia value chain to meet what we expect to be robust global demand for low-carbon ammonia for both traditional and new applications”, said CF Industries president and chief executive Tony Will.

JERA Global chief executive and chair Yukio Kani, commented, “Collaboration and partnership are at the heart of JERA’s strategy to achieve our decarbonization goals”.

“The U.S. remains a cornerstone market for JERA, and this initiative underscores our long-term commitment to expanding our presence with diversified and sustainable energy projects”, Kani added. “As we move forward, we will continue to accelerate the availability of low-carbon fuels and develop their supply chains, driving meaningful progress toward a more stable and cleaner energy future”.

“Mitsui will establish a low-carbon ammonia value-chain worldwide by leveraging its presence in the US gas value chain from natural gas to chemicals including this project, and our strength and track record in the global trading of ammonia”, said Mitsui president and chief executive Kenichi Hori. “We aim to lower carbon emissions across various industries through investment in projects of this kind”.

The JV expects to qualify for Section 45Q of the Internal Revenue Code, which provides a tax credit per metric ton of carbon emissions permanently sequestered.

The engineering, procurement and module fabrication contract has gone to Technip Energies NV. The Dutch engineering major, whose headquarters is in Nanterre, France, said separately the contract is a “major” one, meaning it exceeds EUR 1 billion ($1.1 billion).

Technip Energies will work with Lyngby, Denmark-based Topsoe A/S, which the JV contracted for its SynCOR ATR ammonia plant technology.

Meanwhile 1PointFive said it has taken an FID on the Pelican project “and is moving through the development process”. The Pelican hub will store industrial emissions in geologic formations over a mile underground.

To contact the author, email jov.onsat@rigzone.com