OCI NV reported that it continues to expand its offering of low carbon products to its customers, and will be able to produce blue ammonia at OCI Beaumont, Texas, up to the full ammonia production capacity of 365,000 mt/y, starting in the second half of 2021, according to its first-quarter financial report released on May 5.
It said it recently signed one agreement and one Letter of Intent (LOI) with two major industrial gases companies for the supply of low carbon hydrogen to the plant.
Decarbonizing the feedstock supply will allow OCI Beaumont to reduce its carbon footprint and offer both blue ammonia and bio-methanol to OCI’s downstream customers.
“This is even more pertinent at OCI Beaumont, which is strategically located in Texas in the center of one of the largest hubs for potential blue and green ammonia customers in the U.S.,” OCI NV CEO Ahmed El-Hoshy told analysts and investors at a company first-quarter earnings call on May 5.
“It has a large customer base that is not only an industrial feedstock space, but also fertilizers, where Texas is also a major producer. There is also future marine demand, as Beaumont is in close proximity to Houston, one of the four major global bunkering hubs for shipping,” said the CEO.
OCI already produces green ammonia at OCI Nitrogen in the Netherlands.
The company sees the use of ammonia or methanol as a shipping fuel as “particularly promising,” and in March signed two agreements to commercialize ammonia and methanol as shipping fuels by 2023/24 (GM March 5, p. 1).
OCI signed the agreements with two major shipping companies and an engine manufacturer. One Memorandum of Understanding (MOU) was inked with Man Energy Solutions (MAN) and Hartmann Gas Carriers Germany GmbH & Co., and a separate MOU with MAN and Eastern Pacific Shipping (EPS).
In a separate development, OCI has established a new Clean Fuels business unit, which focuses on sustainable fuels, and adding low carbon products including ammonia to its current and “fast-growing” biofuels offering of products such as bio-methanol and bio-MTBE.
The company said it established the unit as it sees its fuel business has “large-scale potential” for maritime and road transport in the future.
OCI said on May 5 it has taken the decision that any potential strategic action for its methanol business will be in the form of a partnership rather than a full divestment “given synergies with ammonia, and our leading positions in methanol and bio-methanol.”
“The exciting momentum around our ammonia and methanol business as enablers of the hydrogen economy has influenced our strategic review of our methanol business. Along with the accelerated strengthening of our balance sheet, market conditions for methanol have improved considerably since last year and the outlook remains positive,” said El-Hoshy.
He said a partnership, rather than a full divestment of the business, would facilitate “an acceleration” of the growth for OCI’s Clean Fuels business overall.
The CEO declined to comment on the stage of any negotiations for a potential partnership for the methanol business, but reiterated the company does not see it as “a financial sponsor type investment,” and that it would be “a strategic partnership” that could help “accelerate the growth trajectory” and add value.