US fertilizer producer CF Industries is in the process of commissioning a green ammonia production facility that it calls the first commercial-scale plant of its kind in the US, and has completed a FEED study with cost estimates for a proposed blue ammonia facility through a JV with Mitsui.
The electrolysis system at the Donaldsonville complex is mechanically complete and commissioning is underway for the green ammonia facility, the company said, which at full capacity will produce approximately 20,000 tons of green ammonia per year.
“We are currently evaluating the purchase of renewable energy credits to pair with the startup of the electrolyzer to enable green ammonia production and maximize the value of the 45V production tax credit,” EVP and COO Chris Bohn said in prepared remarks.
Asked about natural buyers for the green ammonia product, EVP Bert Frost responded, “The volume of product that we will be producing could be digestible in a vessel, which could go to Europe. We’re working with some of the ethanol producers for a low-carbon corn value chain, which we believe will lead then to sustainable aviation fuel and low-carbon fuel products. We’re talking to some of the food companies and some of their labeling ventures.”
Mitsui JV
The company has completed a FEED study for its greenfield blue ammonia project with Mitsui, but is conducting additional studies in order to evaluate the specific carbon intensity of various technology options.
The 1-million-ton-per-year blue ammonia project, proposed for CF’s Blue Point complex in Ascension Parish, would result in a cost of approximately $2.5bn, plus an additional $500m for scalable infrastructure, such as storage tanks and loading docks, executives said today.
“We completed our feed study on a conventional steam methane reformer ammonia plant with CCS technologies,” Bohn said, noting that the company is continuing a feed study focused on auto thermal reforming, or ATR, ammonia production technology, and has added a study on flue gas capture.
For ATR technology, CEO Tony Will said, estimates show a 90 to 95% reduction level of CO2, “but the problem with that is because the way that the technology works, you have to have a very, very large air separation unit to introduce the nitrogen back into the process that you don’t get because you’re not doing steam methane reforming. And the electricity draw on a large air seperation unit like that is a tremendous adder to the cost of the project as well as operational cost,” he said.
“And based on the grids where we’re thinking about, the scope two emissions become substantial,” Will added, noting that the company is evaluating all possible paths forward to offer solutions depending on the carbon intensity levels that are ultimately demanded by customers.
The company anticipates having greater clarity on the demand picture for low-carbon ammonia later this year, which, in addition to the further FEED studies, should allow for a final investment decision in 2H24. In announcing the JV, the parties said they would reach FID in 2023.
More blue
CF has a full slate of JVs for potential blue ammonia projects. In addition to Mitsui, the company also has agreements in place with JERA Co., Korean steelmaker POSCO, and Korean chemical maker LOTTE for potential projects.
“I would say the Korean government and the customers as a result are a little bit behind from a timeline perspective compared to the Japanese,” Will said, “and so we’ll likely be making a decision around a plant, principally targeting the Japanese market first, and then we’ll eventually look at both the Korean market and potentially European partners that we’ve discussed with as well.”
CF is also installing a CO2 dehydration and compression unit at its Donaldsonville fertilizer coplex, which executives said will be ready for startup in 2025. Once in service, the unit will enable up to 2 million tons of captured process CO2 to be transported and permanently stored by its partner, ExxonMobil. “This will enable low-carbon ammonia production and generate substantial 45Q tax credits,” Bohn said in his remarks.
CF is bullish on blue ammonia as it makes economic sense even without 45Q, said Will, who added that the net benefit to the company from the Donaldsonville Blue Ammonia Project is roughly $100m annually.
“So just on the face of it that’s a great investment for us,” Will added. “Now, that said, we have had ever increasing interest levels in blue ammonia from a variety of different constituents, including a number of our existing customers, but also some other folks that have reached out.”
“And so based on a relatively small volume of decarbonized or blue ammonia that’s going to be available, principally just from us beginning in 2025, and the appetite in the marketplace, we absolutely believe that it’s going to be a commodity in scarce supply relative to the appetite for it, and so willl carry with it a premium in the marketplace just on the basis of supply and demand.”
