Denbury Carbon Solutions has executed a CO2 Services Agreement with Clean Hydrogen Works, according to a press release.
The subsidiary of Denbury Inc. will transport and sequester CO2 captured from Clean Hydrogen’s planned hydrogen-ammonia complex in Ascension Parish, Louisiana, which is anticipated to be built less than two miles from Denbury’s existing CO2 pipeline network.
The planned clean hydrogen-ammonia complex, Ascension Clean Energy (ACE), is expected to include two ammonia blocks with estimated production totaling 7.2 million tons of ammonia per year. Approximately 75% of the planned ammonia production volume is supported by letters of intent offtake agreements.
Denbury has invested USD 10m into the ACE project through an investment in Clean Hydrogen and has committed to invest another USD 10m when certain project milestones are achieved.
The proposed facilities are to be constructed on a 1,700-acre site on the west bank of the Mississippi River in Donaldsonville, Louisiana. The two ammonia blocks are currently projected to start up in a staged approach, with Block 1 production anticipated to commence in 2027. A final investment decision on the project is anticipated in 2024.
Denbury has the exclusive right to transport and sequester all of the CO2 captured at ACE for a period of 12 years following startup, with multiple extension options.
Captured CO2 volumes are estimated to be approximately 12 million metric tons per year (mmtpa), comprising 6 mmtpa from each of the two ammonia blocks.
Underground storage of the CO2 is anticipated in one or more of Denbury’s sequestration sites located in close proximity to Denbury’s CO2 pipeline infrastructure.
With this agreement, the cumulative volumes of CO2 transportation and storage services agreements entered into by Denbury total 20 mmtpa, double the company’s cumulative goal to reach 10 mmtpa by the end of 2022.
Denbury recently agreed to transport and store CO2 for a planned blue methanol project in Lake Charles, Louisiana.
