The state-owned Alaska Gasline Development Corp.’s (AGDC) said it continues to assess a major blue hydrogen/ammonia project for the state despite a negative notification decision by the US Department of Energy (DOE) on AGDC’s proposed Alaska Hydrogen Hub.
AGDC said on Dec. 30 that the concept paper it and other Alaska organizations submitted in November received a “discourage” result for filing a full application. As a result, AGDC does not plan on submitting a formal hydrogen hub application when applications are due to DOE in April 2023.
AGDC’s concept paper proposed leveraging $850 million in federal incentive funding to enable an additional $3.75 billion in non-federal investment to produce up to 1,600 mt/d of blue hydrogen. The Alaska Hydrogen Hub was one of 79 submissions received by the DOE that requested nearly $60 billion in federal funds.
DOE has envisioned selecting six to ten hydrogen hubs and awarding $7 billion in federal funding to support the production and delivery of clean hydrogen energy to support US emissions reduction goals.
Organizations supporting the AGDC Hub plan included Agrium US, a subsidiary of Nutrien Ltd.; Salamatof Native Association; the University of Alaska Fairbanks’s Alaska Center for Energy and Power (ACEP); and the Alaska Carbon Capture, Utilization, and Storage (CCUS) Consortium, which includes ARC Energy Services LLC; Oil Search (Alaska) LLC, a subsidiary of Santos Ltd.; and Storegga. AGDC was to act as the prime recipient/consortium representative for an unincorporated consortium of organizations that will comprise the Hub.
In October, AGDC signed a Memorandum of Understanding (MOU) with two Japanese companies, Mitsubishi Corp. and TOYO Engineering Corp., and Cook Inlet natural gas producer Hilcorp Alaska to assess the potential of utilizing North Slope natural gas – which AGDC said is the largest untapped natural gas resource in North America – to produce blue ammonia in the Cook Inlet region of Southcentral Alaska (GM Oct. 7, 2022).
The gas would be transported via a long-proposed 807-mile pipeline to Nikiski on the Kenai Peninsula. The project has the potential to liquefy some 20 million mt/y of LNG for export, as well as supply the long-idled Nutrien Kenai plant for the manufacture of blue ammonia.
Nutrien’s plant would serve as the initial production site for the blue hydrogen and ammonia. AGDC said a phased restart of both idled ammonia units would yield 3,500 mt/d of ammonia, which equates to 600 mt/d of hydrogen. Annual production would be 1.26 million mt/y of ammonia consisting of 221,000 mt/y of hydrogen.
AGDC said a possible expansion could more than double the daily ammonia production at the Nutrien plant to 8,900 mt/d (1,600 mt/d hydrogen), with total annual ammonia production of 3.25 million mt (571,000 mt/y hydrogen). AGDC said this would represent 6% of DOE’s 2030 hydrogen production goal of 10 million mt/y.
Nutrien idled the Kenai plant due to limited local natural gas availability in Cook Inlet. AGDC put gas needed for the first phase of production at the Kenai plant as 150 million standard cubic feet per day (MMscfd), which could increase up to 375 MMscfd in the expansion.
AGDC said it has been working collaboratively with Nutrien, which it called a key teaming partner, and its Kenai plant, for the past two years on several technical and commercial development initiatives involving natural gas feedstock, plant restart alternatives, and joint carbon reduction concepts. These efforts include the private sector-led Cook Inlet Blue Ammonia Feasibility Study.
AGDC said Nutrien is currently completing the preliminary engineering study for the restart of the plant, which is necessary to determine the basis of design and program plan to address major cost, schedule, and supply chain challenges and risks. The plant has maintained its operating permits, including air permits, to reduce permitting risks with a plant restart.
AGDC said priority engineering and design activities at the Nutrien plant will focus on upgrades and refurbishment of the two existing steam methane reformers, as well as the support of utility functions.
AGDC said it has worked with ACEP and Alaska CCUS Consortium parties since 2021 on Alaska hydrogen development and joint carbon capture and sequestration opportunities. It said the carbon can be captured and sequestered in secure underground geologic formations, and that the Cook Inlet basin has been identified by scientists as having world-class carbon sequestration potential.
The parties said another Kenai advantage is that round-trip tanker transport from Alaska to key Asian markets is more than 12,000 miles shorter than from the US Gulf Coast, reducing costs and shipping emissions. They also said Alaska has a 45-year record of success exporting LNG to Asia.
Once the Nutrien blue ammonia is up and running, AGDC said Alaska has unlimited potential to eventually use renewable energy to produce green ammonia via electrolysis. A study is currently underway to quantify Cook Inlet’s offshore wind, tidal and geothermal potential, as well as Alaska’s onshore wind and solar expansion. AGDC said there is currently a multitude of large, private sector-led renewable energy projects in development in the state.