LSB Industries Inc., Oklahoma City, said on April 28 that it has entered into an agreement with Lapis Energy, Dallas, to develop a project to capture and permanently sequester CO2 at LSB’s El Dorado, Ark. facility.
The project will commence immediately, subject to the approval of a Class VI permit, with expected completion by 2025. The sequestration will enable LSB to produce over 375,000 mt/y of blue ammonia.
“We are very excited to partner with Lapis and take our first step to becoming a supplier of low carbon or blue ammonia – allowing us to participate in what we believe will become a large future market,” said Mark Behrman, LSB President and CEO. “This project is very compelling for us from both environmental and commercial perspectives.
“Carbon sequestration is a proven means of reducing greenhouse gas emissions from ammonia production, and our El Dorado facility is uniquely located above deep geological formations with the capacity to sequester decades of CO2 production from the plant,” he said. “Our customers, particularly our industrial customers, need solutions to help them decarbonize their supply chains, and low carbon feedstocks represent an attractive opportunity to accomplish this goal in the near-term, while technologies for more sustainable no carbon or green ammonia production continue to become economical.”
Lapis, backed by Cresta Fund Management, a Dallas-based middle-market infrastructure investment firm, will make 100 percent of the capital investment required for the project development. LSB said this is the first carbon capture and sequestration (CCS) project announced in the state of Arkansas, and the third CCS project from ammonia production in the U.S.
Lapis, founded in 2020 by a team of industry experts, is a vertically integrated energy infrastructure development firm focused entirely on decarbonization through CCS.
Once operational, the project at the El Dorado site will initially capture and permanently sequester more than 450,000 mt/y of CO2 in underground saline aquifers, with the potential to increase this quantity based on potential debottlenecking projects at the facility. This will be equivalent to permanently removing approximately 109,000 passenger cars from the road, which represents approximately 11 percent of the cars registered in Arkansas.
The permanently sequestered CO2generated from the facility’s ammonia production is expected to qualify for federal tax credits under Internal Revenue Code Section 45Q, which are currently $50/mt of CO2captured beginning in 2026, but under evaluation by Congress to increase the 45Q tax credit to $85/mt of CO2.
Once in operation, the sequestered CO2 will reduce LSB’s scope 1 GHG emissions by 25 percent from current levels.
“Lapis is the perfect partner for us in our initial low carbon ammonia project given their significant experience and knowledge in the clean energy space,” added Behrman. “We are pleased to be working with them as we begin what we expect to be the first of several projects that will position LSB as a leader in the decarbonization of hydrogen and ammonia and generate significant long-term value for our shareholders.”