Norwegian fertilizer company Yara is planning to spend up to $3.45bn between two blue ammonia plants under development in the US as it seeks to decarbonize its ammonia and fertilizer footprint, executives said today.
Executives from the company today said they are seeking to expand into new markets for ammonia by creating demand pull from partnerships and collaboration, with fertilizer and shipping fuel representing the largest target markets by 2050, followed by ammonia as a hydrogen carrier and power generation.
At the same time, Yara said today it would postpone a planned IPO of a minority stake in Yara Clean Ammonia due to weak valuations, the company said. Yara last year retained ABG Sundal Collier and JP Morgan to explore an IPO.
“The United States over the last six to 12 months has become a significant opportunity space for ammonia,” the CEO of Yara Clean Ammonia, Magnus Ankarstrand, said in a presentation today.
Yara has been assessing opportunities for potential new blue ammonia projects in the US for some time, with its most recent project being the Freeport ammonia plant, built in conjunction with BSF in 2018.
“The combination of low-cost gas, the opportunity for significant scale, and, in relative terms, affordable CCS alone makes this a significant opportunity” for Yara Clean Ammonia, Ankarstrand said. However, the opportunity has been amplified by tax credits now available through the Inflation Reduction Act.
For a blue ammonia project in the US with Capex requirements of between $2.6bn – $2.9bn, Yara expects to accumulate $1.5bn – $1.8bn of 45Q tax credits net of CCS costs over 12 years, representing more than half of the Capex costs.
Yara is developing Project YaREN in a 50/50 partnership with Enbridge in Ingleside, Texas, which requires $1.3bn – $1.45bn of Capex from Yara. The company is also advancing a previously unannounced project in North America in which it owns a majority stake and is expected to require $1.8bn – $2bn in Capex from Yara, according to a presentation.
