Enagas SA, Europe’s largest LNG
terminals operator, is planning to enter the business of
processing ammonia and CO2 as it seeks to gradually diversify away
from natural gas distribution and into markets that will gain importance with
the energy transition, Bloomberg reported.
“We intend to include in our
strategic update, which will be presented within this year, our participation
in the CO2 and ammonia businesses from the infrastructure point of
view,” Enagas CEO Arturo Gonzalo said in an interview.
The move is part of the Madrid
company’s effort to capitalize on its large gas infrastructure to create new
sources of income linked to clean energy and carbon-emissions reduction, as
profits from its regulated assets ebb.
Shifting from gas
to ammonia is already an option included in the long-term offtake
agreement for Germany’s first land-based, LNG import terminal, which
Enagas is going to operate.
“We think there’s going to be an
infrastructure side to these businesses. You’re going to need hardware, loading
facilities, tanks,” Gonzalo said. “All of that can be provided by Enagas in the
most competitive way.”
Liquid ammonia is denser
than LNG, so readapting gas tanks would reduce their capacity to about 70%, but
an LNG gas plant is still the “best place” to liquefy it, as well as to liquefy
CO2, he said. “We have a very strong incumbent position also for these new
molecules, so what we are working on is how to make our LNG plants evolve into
multi-molecule facilities,” he said.
Enagas may also use smaller-volume
vessels ranging from 10,000-20,000 cubic meters for the new operations,
comparable to the 12,000-cubic-meter LNG bunkering vessel it operates in the
southern Spanish port of Algeciras, according to Gonzalo.
The natural gas business is still
the company’s priority, but as long as it has spare capacity or is able to
build new capacity in its existing plants, Enagas is going to be in a position
to enter these new businesses, Gonzalo said. “If there’s an attractive return
in CO2 and ammonia that requires new capacity being built, then of
course that we’ll consider that,” he added.
Enagas’s stake in Tallgrass
Energy Partners LP is helping the Madrid-based firm build expertise in the
CO2 business, as the US gas transportation company’s Trailblazer unit overhauls
its pipeline system to transport CO2 for permanent sequestration, Gonzalo said.
The company has
also slashed its annual dividend by 43% to €1 ($1.06) per share in
order to fund its investment plan for hydrogen assets of about €3.2 billion, so
“it’s not in a hurry” to sell its stake of about 30% in Tallgrass, he said.
Gonzalo added that Enagas expects its regulated asset base, or RAB, to grow by
about 10% annually through 2030.
