CF Industries Holdings Inc. announced on Feb. 27 that it has entered into a Memorandum of Understanding (MOU) with Lotte Chemical Corp., Seoul, South Korea’s largest chemical company, that will guide the companies in a joint exploration of clean ammonia production and long-term clean ammonia offtake into South Korea.
The MOU establishes a framework for the companies to assess the joint development of and investment in a greenfield clean ammonia production facility in the US, including at CF’s Blue Point Complex in Louisiana.
“We are pleased to advance our relationship with Lotte and leverage the world class expertise of both companies to meet the substantial emerging demand for clean ammonia in South Korea,” said Tony Will, CF President and CEO. “We look forward to helping Lotte and South Korea meet their clean ammonia requirements as we continue to accelerate the world’s transition to clean energy.”
“In order to bolster the domestic hydrogen economy, it is important to secure a stable supply of clean hydrogen and ammonia, especially in overseas regions with abundant energy and low geopolitical risks,” said Jin-koo Hwang, Lotte’s Head of Hydrogen Energy. “Through strategic collaboration with CF Industries, which has a long history and business experience, we will secure a production base in the USA and lead the global distribution channel.”
The companies plan to quantify expected clean ammonia demand in South Korea for power generation, bunkering, and other sectors, taking into account regulatory and policy requirements, as well as safety and environmental considerations. This workstream will confirm the scale of long-term offtake volume expectations for a potential clean ammonia facility.
Lotte has established a plan to produce and sell 1.2 million mt of clean hydrogen by investing a total of 6 trillion won ($4.3 billion) by 2030. It hopes to make annual revenue of 5 trillion won ($3.6 billion) from its hydrogen and ammonia business.
CF recently signed an 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 (GM Jan. 20, p. 1). The companies will evaluate 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.
Since 2020, CF has advanced clean ammonia projects, including 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 tons of CO2 per year, starting in 2025 (GM Aug. 12, 2022); commencing a front-end engineering and design (FEED) study to construct a $2 billion, 1.7 million mt/y greenfield blue ammonia facility utilizing CCS at its Blue Point Complex in Ascension Parish, La., with Mitsui & Co. Ltd. (GM Aug. 19, 2022); and constructing North America’s first commercial scale green ammonia capacity at its Donaldsonville Complex, enabling up to 20,000 tons of green ammonia production beginning in 2024 (GM Oct. 30, 2020).
Lotte recently signed a Joint Study Agreement (JSA) with Germany’s RWE Supply & Trading, Essen, and Mitsubishi Corp., Tokyo, to develop a large-scale integrated blue and green ammonia production and export project at the Port of Corpus Christi, Texas (GM Feb. 10, p. 1). The target date for first production is 2030, and the companies are looking at a phased build-out of production capacity of up to 10 million mt/y.
Lotte has signed a deal with Japan’s Itochu, Tokyo, to jointly invest in ammonia production facilities (GM July 29, 2022), and has inked an offtake agreement to take green ammonia from Trammo Inc. (GM Sept. 17, 2021). In late 2022, it partnered with six other companies to build a clean ammonia supply chain in the West Sea region of Korea.