NuStar Energy LP, San Antonio, said on Feb. 3 it is looking to increase the utilization of its anhydrous ammonia pipeline with low-spend, high-return projects to connect and extend the system to new and current customers.
“These projects would supply ammonia for traditional uses, like the fertilizer that augments U.S. food production, as well as corn for ethanol production, across the Midwest,” said NuStar President and CEO Brad Barron. “We are also partnering with customers and potential customers to expand our utilization with ‘green’ ammonia projects, for existing applications and for visionary future opportunities like renewable electricity generation and safe, efficient transportation for hydrogen to power fuel-cell vehicles.”
The company said ammonia throughput on the pipeline was up 20 percent in fourth-quarter 2021 from year-ago levels and up 42 percent over the third-quarter. This is in line with fertilizer industry reports of a very good fall ammonia application season.
Even with recently increased volumes, the pipeline can still accommodate significant volumes. In a January presentation, NuStar said ammonia volumes had been running at 3,500 st/d, with the potential to grow this to 5,500 st/d. The pipeline is the longest and only such pipeline in the U.S. It spans some 2,000 miles and seven states from Louisiana, north along the Mississippi River to Missouri, and then northwest and east, to Nebraska and Indiana.
The company told analysts current pipeline demand is very strong, but that it is seeing green and blue ammonia interest from particular customers who have a business plan to ship their product up the NuStar system and use that ammonia as a source of hydrogen, with one potential use as fuel for fleet vehicles.
The company said those conversations have progressed quite a bit in the last few months and it hopes to provide more details in the first half as these potential customers work to make sure they have space in the pipeline to support their business models.
While NuStar expects to have more definition sooner rather than later, it expects it will still probably be a couple of years before the new service begins.
Barron told analysts that the costs will be low, as the company will not need to do anything to the pipeline, just add connections. Where those connections will be is still being vetted. “We do not have to expand capacity on the pipeline,” said Barron, “but I think we’ll see upside two ways. Just one, the additional volume for new demand, and then also given that the discussion is around guaranteed space, firm space on the line should be a premium market as well.”
NuStar looked to expand the pipeline to an Archer Daniels Midland facility in Decatur, Ill., in 2015 (GM Nov. 23, 2015), but the project was never completed.