CF Industries Holdings Inc. and Mitsui & Co. Ltd.’s proposed low carbon ammonia plant at CF’s Blue Point Complex in Louisiana has a cost estimate of $3 billion, according to a recently prepared front-end engineering and design (FEED) study. Initial projections were put at $2 billion in 2022 (GM Aug. 19, 2022).
The FEED was for a 1.7 million mt/y greenfield steam methane reforming (SMR) ammonia facility and carbon capture and sequestration (CCS) technologies. Approximately $2.5 billion was allocated to the ammonia facility and CCS and approximately $500 million to scalable common infrastructure for the site, such as ammonia storage and vessel loading docks.
The partners have opted to progress two additional FEED studies before making a final investment decision (FID). These will be focused on technologies with the potential to further reduce the carbon intensity of the proposed ammonia plant, and include a previously announced FEED study evaluating autothermal reforming (ATR) ammonia production technology and a recently added FEED study assessing the cost and viability of adding flue gas capture to an SMR ammonia facility. Both FEED studies are expected to be completed in the second half of 2024.
CF and Mitsui also expect greater clarity later in 2024
regarding demand for low-carbon ammonia, including the ammonia carbon intensity
requirements of offtake partners as well as government incentives and
regulatory developments in local jurisdictions. As a result of these factors,
the companies are targeting the second half of 2024 for FID on the proposed
ammonia plant.
Will explained to analysts that conventional CCS technologies sequester 70% of
the CO2, while the alternatives being explored can pull 90-95%. However, they
may have a much higher cost to install as the ATR option would require a very
large air separation unit and more electricity.
What the customers want is also a factor. He said the Japanese preliminarily have said they would be willing to accept lower carbon intensity, whereas some other nations, specifically Korea, are looking for carbon intensity that basically has a 90% reduction.
“I would say the Korean government and the customers, as a result, are a little bit behind from a timeline perspective compared to the Japanese, and so we will likely be making a decision around a plan principally targeting the Japanese market first, and then we’ll eventually look at both Korean and potentially European partners,” Will told analysts.
CF said the electrolysis system is mechanically complete and commissioning activities are underway at its 20,000 st/y green ammonia facility at its Donaldsonville Complex. CF said this represents North America’s first commercial-scale green ammonia capacity.
Once the green project is complete, CF said it will move toward the production of blue ammonia. Will told attendees of the BMO 2023 Growth & ESG Conference in December (GM Dec. 8, 2023) that the time for massive investment in green ammonia production is not here yet and it could be decades away. Instead, he said blue ammonia is in big demand.
CF said engineering activities for the construction of a dehydration and compression unit at Donaldsonville continue to advance, all major equipment for the facility has been procured, and fabrication of the CO2 compressors is proceeding. Once in service, the dehydration and compression unit will enable up to 2 million tons of captured process CO2 to be transported and permanently stored by ExxonMobil. Start-up for the project is scheduled for 2025, at which point CF will be able to produce significant volumes of low-carbon ammonia.
CF expects a net benefit from the Donaldsonville blue ammonia project at about $100 million per year. The company said that based on a relatively small volume of decarbonized or blue ammonia that will be available from the company in 2025 and the appetite in the marketplace, it believes that the commodity will be in scarce supply.
CF also reported that it has entered into an agreement for 2024 with BP for the purchase of 4.4 billion cubic feet of certified natural gas, which is double its purchase in 2023 (GM Feb. 17, 2023). The certificates purchased by CF are issued by not-for-profit MiQ and certify that certain natural gas produced by BP has a 90% lower methane emissions intensity – the ratio of methane emissions to natural gas produced – than the industry average. CF said methane emissions throughout the natural gas supply chain are a significant contributor to the lifecycle carbon intensity of ammonia production and the second largest source of Scope 3 emissions for the company.