All posts by hlancey@bloomberg.net

Fluor Awarded Blue NH3 Contract

Blue Ammonia, Carbon, Hydrogen, News, News Briefs, Texas, U.S.

Fluor Corp., Irving, Texas, announced that it has been awarded a contract for front-end engineering and design (FEED) and procurement services by Cormorant Clean Energy LLC, a subsidiary of 8 Rivers Capital, LLC, Durham, N.C., for the construction of a low-carbon blue ammonia production facility. Fluor will recognize the contract in third-quarter 2023.

8 Rivers Capital told Green Markets that no further details about the facility were available at this time, including location, capacity, or timeline.

Once constructed, the facility will be the first commercial-scale application of 8 Rivers’ 8RH2 ultra-low-carbon hydrogen production technology. The hydrogen produced will be converted into ammonia that can be stored and transported until it is “cracked” back into hydrogen after reaching its end user.

Fluor will be responsible for FEED services of the entire facility, including process units, utilities and offsites, buildings, and roads. The project includes multiple licensed technology units which Fluor will develop deliverables for using process design packages from the licensors.

KBR Selected for Portuguese Green NH3 Project

Green Ammonia, Houston, TX, Hydrogen, News, News Briefs

Houston-based KBR reported on Oct. 11 that its K-GreeN® technology has been selected by Madoqua Power2X (Madoqua), a joint venture of Madoqua Renewables, Power2X, and Copenhagen Infrastructure Partners, for Madoqua’s green ammonia project at Sines Industrial Zone in Portugal.

KBR will provide technology license, proprietary engineering design and equipment, and catalyst solutions to Madoqua for its green ammonia projects, including 1,200 mt/d in Phase 1 and 1,500 mt/d in Phase 2. Madoqua will also implement KBR’s suite of advanced digital solutions to optimize the operations and energy efficiency for the facility.

In other green news, KBR on Oct. 12 announced that it has launched PureM, an advanced green methanol technology, which will augment its clean ammonia and hydrogen technologies. It said PureM provides a cleaner pathway for downstream production of fuels or high-value chemicals, which are key ingredients in sustainable coatings, adhesives, and other materials that support a net-zero transition.

Green Hydrogen/Ammonia Plant Planned in Spain

Germany, Green Ammonia, Green Hydrogen, News, News Briefs

Germany’s Thyssenkrupp Uhde GmbH has signed an engineering service contract with UK-based Hive Energy Ltd. for a 1,200 mt/day green hydrogen/ammonia production plant in Spain.

Thyssenkrupp Udhe said in an Oct. 9 press release that it will deliver a pre-FEED to support the development of the green hydrogen/ammonia production plant. It said the contract award followed a techno-economic study for the power-to-ammonia facility, which was performed in 2022 using Thyssenkrupp Uhde’s proprietary RHAMFS methodology.

Thyssenkrupp Udhe will base the pre-FEED on its Uhde ammonia synthesis technology, which it said has been specifically developed “to tackle the unique challenges of dynamic ammonia production,” and will also provide integration engineering for the process facility.

The pre-FEED will allow Hive Energy to advance through the subsequent commercial and regulatory phases of the project development.

According to its website, Hive Energy has been involved in the development, construction, and operation of several large-scale renewable energy projects since its founding in 2012. The company said it now operates from over 20 countries globally, including Brazil, Canada, Croatia, Greece, Italy, New Zealand, Serbia, South Africa, Spain, and the UK.

Vale, BluestOne Partner on Slag

Brazil, Canada, Carbon, News, News Briefs

Toronto-based Vale Base Metals has signed a commercial offtake and nonbinding Memorandum of Understanding (MOU) with BluestOne, Saltinho, São Paulo, a Brazilian company that transforms waste to products for agriculture, to provide up to 50,000 mt/y of refinery slag from its Onça Puma nickel mine in Brazil for the next 10 years.

BluestOne will commence construction within two years of a plant near Onça Puma to process slag products into a solution to enhance carbon-efficient mineral fertilizers with broad use in the agricultural sector.

Both companies also agreed to work together to explore additional circular economy opportunities for treatment and repurposing further waste products from Onça Puma, as well as other Vale Base Metals operations globally. This includes potentially bolstering BluestOne’s production of recycled nickel recovered from waste products around the world.

The MOU also outlines cooperation between Vale and BluestOne to explore additional sustainability partnerships, including utilizing the fertilizer from slag for biomass production.

Biden Awards $7 B in Funding for Seven Hydrogen Hubs

California, Featured, Gulf Coast, Hydrogen, Natural Gas, News, Texas, U.S.

President Joe Biden and Energy Secretary Jennifer Granholm on Oct. 13 are set to announce the seven projects – stretching from Pennsylvania to California – that have been selected to receive $7 billion in government backing for hydrogen hubs, according to Bloomberg.

The announcement will be made at the Port of Philadelphia, which the administration said would use hydrogen from a hub proposed for portions of Pennsylvania, Delaware, and New Jersey to fuel trucks and other heavy-duty equipment. 

As part of its goal of reaching net-zero emissions by 2050, the Biden administration is throwing its weight behind hydrogen and the hubs, which are broad networks of hydrogen producers and consumers spanning multiple states.

While almost no hydrogen is currently produced in the US, that figure could increase to 10 million mt by 2030, according to an Energy Department report. The administration has started an effort to reduce costs by 80%, to $1 per kilogram by 2030. High cost remains one of the biggest barriers to hydrogen’s widespread use.

Project Name Location Federal Cost Share
Appalachian Hydrogen Hub West Virginia, Ohio, Pennsylvania Up to $925M
California Hydrogen Hub California Up to $1.2B
Gulf Coast Hydrogen Hub Texas Up to $1.2B
Heartland Hydrogen Hub Minnesota, North Dakota, South Dakota Up to $925M
Mid-Atlantic Hydrogen Hub Pennsylvania, Delaware, New Jersey Up to $750M
Midwest Hydrogen Hub Illinois, Indiana, Michigan Up to $1B
Pacific Northwest Hydrogen Hub Washington, Oregon, Montana Up to $1B

The Pennsylvania hub will receive up to $750 million in funding and will use existing oil infrastructure to produce hydrogen from both renewable and nuclear energy, according to the White House. Project partners include refiner PBF Energy Inc. and Air Liquide SA.

Other winners include as much as $1.2 billion for a California-based project that will produce hydrogen exclusively from renewable energy and biomass and is aimed at decarbonizing public transportation, heavy-duty trucking, and port operations. Project partners include Amazon and Air Products. 

A hydrogen hub backed by Sen. Joe Manchin is receiving up to $925 million and will produce hydrogen using natural gas with carbon capture, according to the White House. The hub spans parts of West Virginia, Ohio, and Pennsylvania and is partnering with natural gas producer EQT Corp.

A Gulf Coast hydrogen hub centered in Houston and backed by companies including Exxon and Chevron Corp. was awarded as much as $1.2 billion. A hub proposed by a coalition of Midwest states that would be partially powered by nuclear energy to provide hydrogen for uses including steel and glass production was awarded up to $1 billion. Project partners include reactor operators Exelon Corp. and Constellation Energy Corp.

The hydrogen hub awards, which were funded in 2021’s bipartisan infrastructure law, mark the culmination of a furious race between states. The Energy Department in January urged 33 projects to submit full applications, after receiving 79 proposals. In addition, the Biden administration has announced plans to award $1 billion to stimulate demand for hydrogen to provide “market certainty” and ensure demand. 

Though hydrogen is a clean-burning source of power, it takes large amounts of energy to produce and has a bigger carbon footprint when made with electricity from coal or natural gas. Environmentalists have cautioned that a wave of hydrogen production could drive further demand for fossil-based electricity and unleash more greenhouse gas emissions if it isn’t made using clean power sources.

“The stakes are very high,” said Rachel Fakhry, a policy director at the Natural Resources Defense Council. “The hubs are going to be the first real touchstone of what a hydrogen economy looks like on the ground.”

Green Energy Park, Brazil Plan Green NH3 Project

Ammonia, Brazil, Europe, News, News Briefs

Green Energy Park and the State of Piauí, Brazil, on Oct. 11announced the signing of a Letter of Intent (LOI) for the production and export of an initial 1 million mt/y of ammonia from renewable energy sources.

The parties noted the state’s potential for producing solar and wind energy. Green Energy Park has chosen Piauí as the first of a minimum of eight gigawatt upstream facilities to supply its global distribution network, with an initial focus on European end markets.

The parties will perform a feasibility study for exporting renewable energy via ammonia from Piauí, to various locations around the world, targeting the production and export of around 5 million mt/y.

Export destinations include Europe, with a focus on supplying Green Energy Park Krk, a purpose-built ammonia midstream facility at the North Adriatic Sea on the Croatian island of Krk. Green Energy Park Krk has a total capacity of 10 million mt of ammonia import, storage, and distribution per year.

Nitricity Commissions Pilot System

Calcium Nitrate, California, News, News Briefs

Ag tech startup Nitricity Inc., Fremont, Calif., on Oct. 12 announced the commissioning of their next-generation pilot system. In partnership with Olam Food Ingredients, climate tech investor Elemental Excelerator, and the Madera/Chowchilla Resource Conservation District, the project will support Nitricity and Olam’s field trial on young almond trees, which is scheduled to begin next spring in Chowchilla, Calif.

Nitricity’s new pilot system is capable of production rates five times greater than previous prototypes, which the company says represents a significant advancement in Nitricity’s technology development. Over the next few months, the technology will undergo performance testing, producing calcium nitrate to be applied on Olam’s test plot of young almond trees.

Nitricity said the calcium nitrate tackles GHG emissions via two mechanisms: electrified production of fertilizer and reduced field emissions from fertilizer application.

Australian Phosphate Production Planned for 2024

Australia, News, News Briefs, Phosphate

Australian mining company North West Phosphate expects to spend A$350 million ($220.4 million) to start mining phosphates and producing concentrate by early 2024 at the company’s Paradise South deposit in North West Queensland, according to ABC North West Queensland.

Paradise South is located adjacent to the Lady Loretta zinc mine owned by Glencore, approximately 130 kilometers northwest of Mount Isa. According to the company website, it will be an open cut mining operation with mine scheduling completed to excavate up to 2 million mt/y of phosphate ore, with a mine life of up to 50 years.

The Paradise South mine will include a processing plant onsite to produce the phosphate concentrate product ready for domestic and international markets.

Paradise South was the maiden mineral reserve for the former Legend International Holdings Inc., which eventually went into bankruptcy (GM March 14, 2011; July 22, 2016).

Ammonia

Ammonia, Brazil, Eastern Cornbelt, India, Market Watch, Middle East, Northwestern Europe, South Central, Southern Plains, Tampa, U.S. Gulf, Western Cornbelt

US Gulf/Tampa:

Expectations of another possible increase in the Tampa ammonia price for November were reportedly fueled by the deadly attack in Israel and growing tension in the Middle East. Others cautioned, however, that any argument in favor of an increase could be void if oil and gas markets cool off in the coming weeks, after the initial shock.

In the wake of October’s $575/mt CFR Tampa settlement, truck pricing out of Gulf Coast production points reportedly firmed to a broad $520-$625/st FOB range, depending on location.

Eastern Cornbelt:

Ammonia prices continued to edge higher in the region. While CF remained at $725/st FOB for ammonia in the Eastern Cornbelt, Koch reportedly raised offers to as high as $740-$750/st FOB in Illinois and Indiana.

Western Cornbelt:

The ammonia market was steady at $715-$725/st FOB in the Western Cornbelt, with the low confirmed in Nebraska and the high in Iowa and Missouri.

Southern Plains:

Ammonia prices were quoted at $620-$675/st FOB Oklahoma production points, with the low reported at Pryor and the high at Verdigris. Sources quoted the latest offers out of Woodward, Okla., at the $650/st FOB level.

South Central:

Ammonia prices were reported at $450/st FOB Midway, Tenn., and $520/st FOB Hopewell, Va., with truck pricing out of Gulf Coast production points quoted in a broad range at $520-$625/st FOB, depending on location.

India: 

A lack of reported spot deals left the India ammonia price at the last-done $510/mt CFR. Most purchases are coming from larger buyers under contracts that offer significant discounts from the spot market.

Middle East: 

Supply in the Arab Gulf is expected to pick up next week when the Ma’aden plant comes back online. Even with the return of the Saudi ammonia line, the closure of the Salalah plant in Oman for a routine maintenance turnaround will keep supplies from building up. The Omani plant is expected to resume production in mid-November.

Iranian ammonia exports totaled 450,000 mt in January-September, Trade Data Monitor reported,a roughly 17% increase from the year-ago 384,000 mt. India took 87% of the exports with 389,000 mt, followed by Turkey with 60,000 mt. Iran exported 58,000 mt in September, matching its September 2022 total.

Northwest Europe:  

The jump in the October Tampa price and the war between Israel and Hamas prompted some industry observers to predict higher prices for second-half October and November. However, there has so far been no rise in natural gas prices in Europe, some pointed out, and pricing jitters appeared to ease by the end of the week.

Sources noted reports of plants in Eastern Europe slowly ramping up production. The current import price of $550-$555/mt CFR gives plenty of headroom above the production cost ex-plant. Besides the slow increase in domestic production, demand is soft, sources said, leaving few drivers for higher prices at this time.

Brazil:

Brazil exports ammonia on an “as-available” basis. September ammonia exports were limited to 20 mt, all to Uruguay, compared to 16,000 mt exported in September 2022. Trade Data Monitor reported January-September exports at 48,000 mt, down 27% from the 66,000 mt shipped through the same period of 2022.

Imports totaled 224,000 mt through the first three quarters of the year, down 30% from the 319,000 mt received in January-September 2022. Trinidad and Tobago remained the top supplier with 203,000 mt. September imports were 15,000 mt, against zero imports in September 2022.

Urea

Black Sea, Brazil, China, Eastern Cornbelt, India, Market Watch, Middle East, Poland, South Central, Southeast, Southeast Asia, Southern Plains, U.S. Gulf, Urea, Western Cornbelt

US Gulf:

NOLA urea barges slipped to $355-$375/st FOB for October-November in a thinly traded market, down from last week’s $380-$405/st FOB range. Sources said prompt, loaded urea barges were still fetching a premium at $397/st FOB NOLA at midweek, however.

Eastern Cornbelt:

Urea was unchanged at $450-$470/st FOB in the Eastern Cornbelt, depending on location, with the low confirmed in Illinois. The Cincinnati, Ohio, market was quoted in the $465-$470/st FOB range at mid-month.

Western Cornbelt:

Urea remained at $450-$470/st FOB in the Western Cornbelt, with the low reported at St. Louis, Mo., and Port Neal, Iowa. Some terminals were reportedly out of product in mid-October.

Southern Plains:

Urea pricing in the Southern Plains slipped to $445-$465/st FOB, down from the previous $475-$485/st FOB range, with the low confirmed at Enid, Okla., and the high at Catoosa/Inola, Okla. Sources pegged the Houston, Texas, market at the $460/st FOB level during the week, give or take.

South Central:

The urea market dropped to $420-$470/st FOB in the South Central region, with the low confirmed at Convent, La., and the high at Little Rock, Ark. The Memphis, Tenn., market was reported at the $460/st FOB level, while Kentucky sources quoted the latest offers out of Ohio River terminals in the $440-$460/st FOB range.

Southeast:

Urea prices in the Southeast were down slightly at $450/st FOB port terminals, below the previous $460-$465/st FOB range.

India:

Sources were united in the view that India will need to buy at least 3 million mt of urea by February 2024. This makes the Indian Potash Ltd. (IPL) tender, set to close on Oct. 20, vital to the country’s supply train.

Pricing expectations for the tender are now focused on $410-$435/mt CFR, with a projected take of 1.5 million mt. Traders remain concerned that a seller could offer one outlier cargo at a price far below the rest of the offers, however, as happened in the Rashtriya Chemicals and Fertilizers Ltd. (RCF) tender.

The tender’s current pricing expectations match price ideas out of the Arab Gulf and Indonesia. Should an offer come in much lower, however, other suppliers may be unable to match the price, leaving India desperately short of the urea it needs for the rest of the year.

Traders previously reported greater-than-expected demand for urea in August. Combined with the limited tonnage booked in the RCF September tender, sources believe a severe urea shortage could occur unless the upcoming IPL tender secures at least 1.5 million mt and is quickly followed with another tender.

Black Sea:     

Prilled urea out of the Black Sea remained steady at $360/mt FOB, following the trend in other major markets.

Southeast Asia:        

The Indonesian urea price remains at $406/mt FOB, based on the last auction held by Pupuk in September. While sources previously said there would be no new sales for the remainder of the year, one more major export offer is now expected.

The resignation of the Indonesian agricultural minister late last week could be one possible hitch, however. The resignation came after the minister was named in a far-reaching corruption probe. The Ministry of Agriculture sets the urea export quota and authorizes the sale of product.

Throughout September, sources reported corruption investigators combing through Pupuk’s files, delaying auction calls and leading some international traders to voice concerns about purchasing opportunities. It is unclear, for now, how the minister’s resignation and the ongoing investigation will affect remaining sales for the year.

Even as concerns that more tons may not be available out of Indonesia, neighboring countries appear to be in a buying mood. Sources said stronger rice prices and good rains are encouraging farmers to step up their buying.

Middle East: 

No new urea spot deals were reported, leaving the price at $420/mt FOB. Sources said the area has gone quiet as plans are laid for offers into the IPL tender.

Sources reported discussions for November and December shipment at $400/mt FOB, but nothing has been concluded. Deals at this level would see urea delivered to India at the lowest end of the estimated price for the IPL tender. The market’s recent $420/mt FOB price would put the landed price into India at the higher end of estimates.

Egyptian producers have also gone quiet following recent deals into Ethiopia and smaller lots into Europe. The price remains at $440/mt FOB.

Iranian urea exports stood at 3.7 million mt in January-September, according to Trade Data Monitor, unchanged from one year earlier. Third-quarter exports were 1.6 million mt, up 7% from the 1.5 million shipped in July-September 2022. September shipments were 408,000 mt, a 30% drop from 584,000 mt in September 2022.

China:

Traders put the current export-equivalent price for granular urea at $410/mt FOB. As permission to export granular product is severely limited, international traders have looked at the ex-plant price to estimate the export price. Prilled urea remained at the $385-$390/mt FOB level, set by the last Indian tender.

There are no expectations that Chinese product will play a role in the upcoming Indian tender, sources said. Prilled urea is being authorized for export in small lots of 6,000-12,000 mt, a size that cannot compete in the Indian market.

Brazil:

Brazil urea prices were quoted at $410-$420/mt CFR, falling from $420-$425/mt CFR at last report. Lower prices were rumored but unconfirmed on Oct. 12.

The urea market in Rondonopolis followed imports lower. Sellers have ample availability for October but are awaiting the results of the India tender, resulting in $525-$550/mt FOB ex-warehouse offers. Few transactions were reported concluding, however, as farmers remain hesitant due to continued weakness in the corn market.

January-September Brazil urea imports softened 7% year-over-year, Trade Data Monitor reported, to 4.8 million mt from 5.1 million mt. About three-quarters of the imports came from five countries – Oman, Qatar, Russia, Nigeria, and Algeria.

September imports were noted at 818,000 mt, a 17% increase from the 700,000 mt received in September 2022. Third-quarter imports totaled 1.9 million mt, down slightly from the 2 million mt logged in July-September 2022.

Poland:

Grupa Azoty produced an estimated 94,000 mt of urea in September, the company reported, up from 86,000 mt in August.