Petronas Energy Canada Ltd (Petronas Canada), Calgary, a subsidiary of Malaysia’s state-owned oil company Petroliam Nasional Berhad (Petronas), Japan’s Itochu Corp. and an unnamed local Calgary-based midstream company, said on Aug. 3 they have entered into a Memorandum of Understanding (MOU) to explore the feasibility of producing 1 million mt/y of blue ammonia in Alberta as a safe and cost-effective method to export hydrogen from Alberta’s Industrial Heartland to Asian markets.
The partners said the US$1.3 billion venture would combine world-class leaders in natural gas development, petrochemical production, and marketing. If the project moves forward, Petronas Canada will supply the natural gas.
Petronas and Itochu plan to jointly coordinate the marketing of the blue ammonia, potentially for thermal power generation in Japan, replacing hydrocarbon-based fuels for power plants, steel, chemical production, and other applications.
Both parties will also explore opportunities to supply blue ammonia for fertilizer and textile productions, assisting these industries in achieving lower-carbon footprints. The midstream company will use Carbon Capture Sequestration (CCS) technology during the conversion process to operate the facility in producing blue ammonia as a carrier for hydrogen.
In addition to the abundant natural gas resource in the region, the partners said the project also carries other competitive advantages, such as the sailing distance from Canada’s West Coast to Japan where the estimated journey will be less than 10 days, shorter than other North American suppliers.
The commercial arrangement will evaluate various options for the ammonia production process and plans to adopt best-in-class environmentally sustainable technology to reduce greenhouse gas (GHG) emissions using CCS facilities.
The project will take approximately three years to complete, with construction starting in 2023 and plant operations coming online in 2027. If realized, the project could create approximately 10,000 direct, indirect and induced jobs during construction and around 3,300 direct, indirect, and induced jobs during operations.
The Government of Japan is seeking to achieve net zero carbon emissions by 2050. In line with this goal, the Ministry of Economy, Trade, and Industry in Japan has set a target to secure 30 million mt of ammonia by 2050 for its growth strategy. This is part of the 100 million mt expected to be developed by Japanese companies and industries for various supply chain developments globally.