All posts by jlarareo@bloomberg.net

Achema Backtracks on Green Hydrogen Project

Green Hydrogen, Lithuania, Low-Carbon

Achema, Lithuania’s top nitrogen producer, has decided to postpone its green hydrogen project and will not use European Union (EU) support. Achema had planned to build a 213 MW green hydrogen production facility by the fall of 2027, and the European Commission (EC) in July approved €122 million in state aid for the Achema project (GM July 19, p.25).

The project has now been postponed following an assessment of the technological and economic challenges and risks involved, the company reported on Sept. 3. The project’s key technical requirements were changed during Achema’s coordination with the EC, and new EU regulations on hourly green energy matching more than doubled the project’s investment, Achema said, making it no longer cost-effective.

“The requirement for hourly matching of green hydrogen production with variable renewables generation from 2030 makes its use in large chemical plants technically difficult and in some cases impossible,” Achema CEO Audrone Kuskyte said.

Green Ammonia Plant in Kakinada Reaches FID

Green Ammonia, Low-Carbon

AM Green Ammonia BV announced on Aug. 27 that it has reached the final investment decision (FID) for its one million mt green ammonia project in Kakinada in Andhra Pradesh. Construction is expected to begin shortly, with the initial phase targeting 1 million mt/y of production capacity in the second half of 2026 and the second phase ramping up to 5 million mt/y by 2030.

The project is located at an existing urea plant in Kakinada, which will be converted into a green ammonia unit. The project has already secured a required 1,300 MW of round-the-clock carbon-free power, enabled through 4,500 MW of solar and wind hybrid capacity in combination with 950 MW of PSP capacity.

“The FID status achieved by our Kakinada plant underscores our commitment to providing carbon-free energy solutions globally while meeting the highest standards. This is a significant milestone for AM Green as it reinforces our position as a leading energy transition solutions platform helping to decarbonize industries like refineries, shipping, fertilizers, power generation, chemicals, and others through low-cost green molecules and its derivatives,” said AM Green Founder Anil Chalamalasetty.

“We have already executed offtake term sheets for this project with major players such as Uniper, Yara, Keppel, and others for intended end use in a range of green hydrogen applications,” he added.

The Kakinada facility has been pre-certified by CertifHy as complying with the EU RFNBO requirements for green ammonia. Most of the production from the facility will be exported to European markets.

AM Green is one of India’s leading energy transition solutions providers, where it is developing production capabilities for green molecules (green hydrogen, green ammonia, biofuels, e-methanol, sustainable aviation fuels, and various downstream high-value chemicals) for decarbonization in hard-to-abate industries.

Worley to Begin FEED for Moroccan Green Project

Green Ammonia, Low-Carbon, Morocco

Australia-based Worley is set to begin initial technical design work as part of the Front-End Engineering and Design (FEED) phase for a green ammonia project in Tarfaya, Morocco. The facility is being developed by OCP Group SA, which plans to invest $7 billion for the plant that will use green hydrogen produced by renewable wind and solar power (GM June 23, 2023).

The plant is scheduled to be operational in 2027 and is expected to produce 1 million mt/y of green ammonia, with plans to increase the capacity by 2032. The project in southern Morocco will also include a transmission grid and storage facilities. It is expected to include a temporary camp for 30,000 workers.

Koch Closes on $3.6 Billion IFCo Acquisition from OCI

Featured, News

Koch Ag & Energy Solutions LLC (KAES) and OCI Global Ltd. announced on Aug. 29 that they have successfully completed Koch’s acquisition of OCI’s Iowa Fertilizer Company LLC (IFCo) fertilizer plant in Wever, Iowa, for $3.6 billion. 

Announced on Dec. 18, 2023 (GM Dec. 22, 2023), the transaction saw OCI agreeing to sell 100% of its indirect equity interests in IFCo to KAES following a strategic review initiated by OCI earlier in 2023. OCI said the transaction would not require approval of OCI shareholders and the company expected little regulatory pushback on the sale.

“This acquisition marks another significant investment in the growth of our fertilizer business,” said Mark Luetters, KAES President. “In the past 15 years we have invested $2 billion in our North American production facilities to enhance reliability, expand production, and improve logistics for our customers. This investment enhances our ability to serve customers long-term by providing additional flexibility to adapt to their nitrogen preferences.”

KAES said the IFCo acquisition will add 300 new employees to the Koch Fertilizer team, which operates four nitrogen production facilities in the US and one in Canada, including an extensive terminal network. The company and its affiliates also have partial ownership of three nitrogen facilities in Trinidad and Tobago, as well as a phosphate production facility in Morocco. 

“We are excited about the opportunities the Wever facility provides to better serve existing and new customers,” said Scott McGinn, Executive Vice President of Koch Fertilizer. “The plant’s location allows us to extend our product offerings to new customers in the eastern US and provide all customers with expanded products and services.”

Commissioned in 2017 as a large-scale greenfield nitrogen fertilizer facility at a cost of $3 billion, IFCo was the first greenfield nitrogen fertilizer plant built in the US in over 25 years and the largest private construction project in Iowa’s history, adding more than 3,500 jobs during the construction period. The facility has 3.5 million mt/y of production capacity, including 195,000 mt/y of sellable anhydrous ammonia, 1.5 million mt/y of UAN, 420,000 mt/y of urea, and more than 1 million mt/y of diesel exhaust fluid (DEF).

“We are exceptionally proud of OCI and the IFCo operating team’s remarkable achievements in converting a cornfield into a world-class global nitrogen facility and in revitalizing a core industry in the United States,” said OCI CEO Ahmed El Hoshy. “KAES today is opportunely positioned both strategically and geographically to leverage and diversify its extensive platform, and to create significant opportunities to drive the facility’s future growth. We have been impressed by the entire KAES team throughout this process and wish them the best of luck in their onward journey.”

OCI said the closing of the sale marks a strategic milestone for the company, with approximately $9.5 billion in grass cash proceeds generated from the IFCo transaction and the recent sales of Fertiglobe (GM Dec. 15, 2023) and OCI’s Beaumont, Texas, low-carbon ammonia project (GM Aug. 9, p. 1).

“The successful closing of the IFCo transaction is the latest example of OCI’s steadfast commitment to creating value for its shareholders,” said Nassef Sawiris, OCI Executive Chairman. “This milestone further reinforces OCI’s standing and record as a successful developer, operator, and investor. Looking ahead, we will continue to deploy our distinctive knowledge, management expertise, and entrepreneurial spirt into further value-accretive ventures.”

Southwestern Fertilizer – Management Brief

Ammonia, Management Briefs

Russ Kugler was inducted into the 2024 Southwestern Fertilizer Hall of Fame at the Omni Hotel and Convention Center in Nashville, Tenn., in July. Present to accept the award were company Co-Presidents John Kugler and Mike Kugler.

Kugler had decades of experience in agriculture. His first fertilizer venture was in anhydrous ammonia sales with Diamond Shamrock. He led the development of the first T reactor in Nebraska for manufacturing 10-34-0 phosphate with research from Frank Achorn and the Tennessee Valley Authority (TVA). Kugler also pioneered the production of higher polyphosphate fertilizers and a full line of clear liquid “KQ Grades” fertilizers.

Kugler was involved in the acquisition of multiple regional fertilizer companies over the years, and also created a propane distribution service, and opened a tire and accessory shop and a chain of K-Store convenience stores.

“It was an honor that that our father, Russ Kugler, was inducted into the 2024 Southwestern Fertilizer Hall of fame the same year we are celebrating Kugler Company’s 100th Anniversary,” John Kugler said. “With our fourth generation integrated into the company, we are looking for many more years of leadership and product innovations within the industries we serve.”