CF Industries Holdings Inc. on Jan. 17 announced that it has signed a Memorandum of Understanding (MOU) with JERA Co. Inc., Japan’s largest energy generator, regarding the supply of up to 500,000 mt/y of clean ammonia beginning in 2027. The MOU establishes a framework for the two to assess how CF would best supply JERA the ammonia under a long-term offtake agreement.
The companies expect to evaluate a range of potential supply options, including a JERA equity investment alongside CF to develop a greenfield clean ammonia facility in Louisiana, and a supplementary long-term offtake agreement from CF’s Donaldsonville Complex in Louisiana
“We are pleased to continue to build our relationship with JERA as we advance our shared commitment to accelerate the world’s transition to clean energy,” said Tony Will, CF President and CEO. “Our leading ammonia production network and disciplined investments in clean energy initiatives have positioned CF Industries at the forefront of clean ammonia supply. We look forward to helping JERA and Japan meet its clean ammonia requirements, which represent the first significant volume of what we believe will be substantial global demand for clean ammonia as a clean energy source.”
“We are pleased to work together with CF Industries on this significant journey towards decarbonizing the industry, and I am confident that CF Industries’ reliable operational capabilities that formed its track record for safe and efficient production as the world’s largest ammonia producer will profoundly contribute to JERA’s structuring of the clean fuel ammonia value chain,” said Yukio Kani, JERA Corporate Vice President.
“JERA will continue its own efforts as well as to take hands with our partners in pursuit of our endeavor to realize and accelerate not only the decarbonization of the Japanese energy industry, but also to solve the energy-related issues that the world is facing,” he added.
The MOU results from a supplier comparison and evaluation process for the procurement of clean ammonia that JERA initiated in February 2022 for the world’s first commercial scale ammonia co-firing operations. The ammonia, which will be required to be produced with at least 60% lower carbon emissions than conventionally produced ammonia, will be co-fired with coal at JERA’s Hekinan Thermal Power Station in order to reduce CO2 emissions from the facility. JERA said it has successfully concluded an ammonia co-firing pilot test and will begin a demonstration project during its fiscal year 2023 at its Hekinan power plant.
Since 2020, CF has advanced projects to decarbonize its ammonia production network. This includes leveraging carbon capture and sequestration (CCS) technologies at its Donaldsonville Complex, where CF is constructing a CO2 dehydration and compression facility to enable the capture and permanent sequestration of up to 2 million mt/y of CO2, which is expected to begin in 2025 (GM Aug. 12, 2022). CF said this project could result in up to 1.7 million tons of blue ammonia per year.
CF has also commenced a front-end engineering and design study (FEED) to construct a greenfield blue ammonia facility utilizing CCS in Ascension Parish, La. (GM Aug. 19, 2022). This $2 billion, 1.7 million t/y project is with Mitsui & Co. Ltd.
In addition, CF is constructing North America’s first commercial scale green ammonia capacity at its Donaldsonville Complex, enabling up to 20,000 st/y of green ammonia production beginning in 2024 (GM Oct. 30, 2020). CF has put the cost of this project at $100 million.