Pembina Pipeline Corp., Calgary, on May 30 announced the signing of a Memorandum of Agreement (MOA) with Japan’s Marubeni Corp. to progress an end-to-end, low-carbon ammonia supply chain from Western Canada to Japan and other Asian markets.
The project includes the joint development of a world-scale, low-carbon hydrogen and ammonia production facility on Pembina-owned lands adjacent to its Redwater Complex in the Alberta Industrial Heartland near Fort Saskatchewan, Alberta. Initial feasibility studies anticipate production of 185,000 mt/y of low-carbon hydrogen and 1 million mt/y of low-carbon ammonia.
“This project represents a transformative opportunity that is highly aligned with Pembina’s strategic priorities, including supporting global decarbonization efforts by exporting low-carbon energy derived from natural gas responsibly produced in Western Canada,” said Stu Taylor, Pembina’s Senior Vice President & Corporate Development Officer.
“The project is an example of Pembina’s ability to leverage its existing asset base and core competencies to develop new integrated value chains, including carbon capture, utilization, and storage (CCUS), and low-carbon energy such as hydrogen and ammonia as a hydrogen carrier and fuel source,” he added. “Marubeni has deep expertise in areas critical to the success of the project, and we are delighted to be working with them to facilitate the global movement towards greater use of low-carbon ammonia and to support Japan’s decarbonization strategy.”
“The project will leverage access to existing infrastructure and benefit from Canada’s abundant natural gas supply, advantaged West Coast shipping access to Asia, and growing carbon capture and sequestration industry,” said Yoshiaki Yokota, Marubeni’s CEO, Energy & Infrastructure Solution Group.
The parties expect the facility to capture a significant amount of the CO2 emissions, with the potential for integrated transportation and sequestration on the proposed Alberta Carbon Grid being developed by Pembina and TC Energy. The low-carbon ammonia would be transported via rail to Canada’s West Coast and shipped to Japan and other Asian markets.
The companies said they will use their complementary strengths to develop and execute the project. Pembina brings its experience in Western Canadian energy infrastructure development, construction and operations, rail logistics, and export. Marubeni, a global independent power producer and integrated trading conglomerate, will leverage its marketing and marine logistics capabilities and is expected to contract for offtake from the facility, which will be used to supply Marubeni-owned and other Japanese utility power plants.
Under the MOA, the two will focus on completing the preliminary front end engineering design (pre-FEED) by early 2024 and will engage with various stakeholders, including governments in Canada and Japan.
The project would potentially serve as an anchor development to advance Pembina’s ongoing efforts to establish a new growth platform known as the Pembina Low Carbon Complex (PLCC). With over 2,000 contiguous acres of undeveloped land located in the Alberta Industrial Heartland, Pembina seeks to develop an industrial complex for low-carbon energy infrastructure to better enable it and third parties to develop projects while reducing costs, emissions, and risk.
The PLCC will be focused on attracting and developing investment for emerging energy transition technologies, sustainable fuels, and chemicals, specifically low-carbon hydrogen and hydrogen carriers such as ammonia and methanol. Projects within the PLCC would gain access to land, low-carbon hydrogen, clean power, natural gas and industrial gases, water, CCUS, and the construction and operation of rail assets to support product movement.
Within the PLCC, Pembina would lease land to third parties and provide infrastructure, logistics, and shared services to tenants, depending on their needs. Tenants are contemplated to capture CO2 and direct those emissions to Pembina in support of the proposed Alberta Carbon Grid. Pembina may also consider direct investments in projects. Pembina said commercial discussions are progressing with various potential tenants and strategic partners.