California’s first blue ammonia and hydrogen facility, has lined up a Carbon Dioxide Management Agreement (CDMA) to sequester 370,000 mt/y of carbon dioxide (CO2) in San Joaquin County in Northern California. The project would produce 150,000 mt/y of blue ammonia and 10,000 mt/y of blue hydrogen.
The CDMA, which was announced on Jan. 4 by California Resources Corp. (CSC), Long Beach, an independent oil and natural gas company, is between CSC’s Carbon TerraVault Holdings LLC (CTV) and Grannus LLC (Grannus), an independent clean-tech company that is building a portfolio of blue ammonia and hydrogen production facilities to supply the agriculture, mobility, and marine fuel markets. Founded in 2012, Tucson’s Grannus is advancing projects in California and Alaska (GM Sept. 9, 2022; Aug. 12,).
The blue ammonia facility will use Grannus’ patented process, which is expected to operate a virtually emissions-free facility once the CO2 is sequestered. The blue ammonia is expected to be supplied to CALAMCO, a California-based cooperative that is also an investor in Grannus. Grannus has entered into a master ammonia sales agreement with CALAMCO in an amount up to its total ammonia requirements. A binding offtake agreement is subject to finalization and approval by Grannus and CALAMCO.
“As a next generation clean-tech company, we are excited to partner with such a knowledgeable carbon management provider as Carbon TerraVault due to their unique vault positioning in the heart of Northern California’s industrial sectors, strong subsurface expertise, and their leadership in California’s new energy economy and carbon management,” said Grannus CEO Matthew Cox. “California’s first blue ammonia fertilizer production facility is expected to further reduce the carbon intensity of California’s agricultural sector while delivering environmentally conscious food to every American’s doorstep. We look forward to furthering our decarbonization efforts in California.”
The Final Investment Decision (FID) for the project and commercial operational dates are being further refined; however, the project is expected to be commercial by the end of 2027 at the latest. aligning with CTV’s goal of 5 million mt/y by end of 2027.
The CO2 will be captured and then stored permanently underground by CTV. The CTV facility has CO2 storage capacity of 71 million mt. CTV will provide infield transportation and a permanent CO2 storage site in exchange for an injection fee on a per ton basis. The project’s location in proximity to the CTV III vault will eliminate the need for long haul CO2 transportation and certain midstream capital requirements. The parties said CO2 capture capital will be effectively eliminated as CO2 capture equipment, the most capital-intensive portion of CCS projects, is inherently incorporated into the base design of the Grannus project.
The CDMA provides Grannus with access to 50 surface acres, with the option for an additional 50 acres if expansion is pursued. CTV will have the right to take a majority stake in the total outstanding equity of the project company that holds the Grannus project. It will have an option to purchase equity in Grannus, as well as a right of first refusal to provide storage services for subsequent Grannus ammonia and hydrogen projects in California.
The construction process of the project and the associated CCS infrastructure is expected to provide at its peak approximately 250 temporary construction jobs and 31 permanent technical jobs.
CSC last month announced that its Carbon TerraVault JV Holdco (CTV JV) has a CO2 sequestration agreement with Lone Cypress Energy Services LLC, Tulsa, an independent energy company, for the proposed Lone Cypress Hydrogen Project, in Kern County, which aims to be California’s first blue hydrogen facility. It will produce 30 mt/d of hydrogen with the potential to expand to 60 mt/d with up to 200,000 mt/y of CO2 sequestration.