ConocoPhillips along with JERA Americas and Uniper have suspended the evaluation of a blue ammonia project on the Gulf Coast, according to sources familiar with the matter.
The project would have had an initial production capacity of 2 MTPA of low-carbon ammonia. ConocoPhillips suspended its evaluation of the project following the completion of a pre-FEED study, the company said in a statement to ReSource.
Additional sources said the project is not moving ahead as originally conceived.
ConocoPhillips and JERA Americas, the Americas arm of Japan’s JERA Co., first announced the evaluation of the project in 2022, and last year signed a heads of agreement with Uniper for blue ammonia offtake.
“Our view is that the nascent lower-carbon hydrogen/ammonia market has not developed at the pace required to support further investment,” Conoco said in the statement. “This decision reflects the company’s strategy to apply capital and resources in a disciplined manner.”
JERA Americas and Uniper did not respond to requests for comment.
The cancellation is the latest to join a growing list of sidelined projects in North America. In August, TC Energy and Marathon Petroleum said they had suspended development of the Prairie Horizon Hydrogen Project, which was part of the Heartland Hydrogen Hub initiative in North Dakota.
Last year, Nutrien suspended development of its proposed 1.2 million tonne clean ammonia project in Geismar, Louisiana, due to increased capital costs and uncertain timing of the emergence of a clean ammonia market.
Executives from ammonia-producing companies have been bearish on the realities of new project development, having experienced previous waves of project announcements followed by underwhelming commissioning activity.
In a presentation last year, OCI Global, the developer of a blue ammonia project in Beaumont, Texas, which just sold to Woodside Energy for $2.3bn, highlighted that of 35 ammonia projects announced in 2008, only 13 of them were realized.
ConocoPhillips, for its part, recently filed for a Class VI carbon sequestration well from the EPA in Texas. An entity called ConocoPhillips Texas Gulf Coast CCS LLC filed for the permit in Refugio County, Texas, according to the EPA. Conoco had previously announced a heads of agreement with Sempra Infrastructure to explore CCS opportunities, but the partners on the Refugio project have not been publicly announced.
In its statement, ConocoPhillips said its Low Carbon Technologies organization “will continue to evaluate other opportunities for competitive investments.”
Editor’s note: Paragraphs one and two have been modified, while paragraph 3 was included to add clarifying language on the project’s suspension.
