All Posts from September 9, 2022

OCI Announces Major Beaumont Blue Ammonia Plant, Iowa CO2 Project

Blue Ammonia, Carbon Dioxide, Europe, Featured, News, Southern Plains, Western Cornbelt

OCI NV, Amsterdam, on Sept. 8 announced plans to start construction of a 1.1 million mt/y blue ammonia plant at Beaumont, Texas, as well as a carbon capture project for the company’s subsidiary Iowa Fertilizer Co. (IFCo) in Wever, Iowa.

The Beaumont plant will be based on KBR technology and will have the infrastructure, including land and utilities, to double capacity to 2.2 million mt/y. The targeted start of production is first-quarter 2025.

“The recent passage of the IRA (Inflation Reduction Act), which bolsters the regulatory framework and competitiveness of clean ammonia in the US, in addition to technological developments in carbon sequestration, is supporting ammonia as a key driver of the energy transition,” said Nassef Sawiris, OCI Executive Chairman. “We believe OCI, a global leader in hydrogen, will play a pioneering role in the future of this industry.”

“We have been working on this project over the past year to put us in a position to break ground by the end of this year,” said Ahmed El-Hoshy, OCI CEO. “Alongside our existing blue and green ammonia projects in the US and the Netherlands, at Fertiglobe in the Middle East and North Africa, and our green methanol business, this facility will allow us to continue to build and strengthen our world-leading ammonia and clean fuels platform.”

OCI said the project is well underway, with detailed engineering and procurement work having started earlier this year. The project has been awarded to Maire Tecnimont on an engineering and procurement basis, critical long-lead pieces of equipment have been ordered, and site works are scheduled to start in the coming weeks.

Capital expenditure is expected to be within OCI’s guidance of up to $450 million growth capex for the Group in 2023, as highlighted in the first-quarter 2022 results report.

OCI noted that the Texas location will have easy access to both the US and export markets, including Europe and Asia. In June, OCI announced a tripling of throughput capacity at its Port of Rotterdam ammonia import terminal to 1.2 million mt/y by 2023 (GM June 17, p. 28), to serve emerging ammonia demand for bunkering to oceangoing vessels and act as a hub to help decarbonize the EU and reduce its reliance on imported natural gas.

The new facility is also positioned to supply blue ammonia to OCI’s plants in the Netherlands. The company is currently running its ammonia production platform at about 40% of its 1.2 mt/y maximum capacity in the Netherlands due to high gas prices, but is able to operate value-added downstream production and continue to address food security concerns with support from imported ammonia.

OCI also announced it has entered into long-term agreements with Navigator and Enerflex for a project to capture and sequester CO2 produced on-site at IFCo Wever plant. The project is targeted to be complete by first-quarter 2025 and would allow IFCo to produce blue ammonia, urea, and DEF.

“This project is a good example of OCI leveraging its existing infrastructure to reduce carbon in a financially attractive way,” said El-Hoshy. “We expect it to generate significant benefits through government tax credits, environmental attributes, and premiums for lower-carbon products, resulting in a steady diversified income stream with attractive returns well above OCI’s hurdle rate. The recently signed IRA increased 45Q credits from $50/mt to $85/mt, enhancing the attractiveness of the project economics and allowing for our team to commence work on phase two. Iowa Fertilizer Co. has been central to our US operations over the past 10 years, and we look forward to continuing to invest in Iowa.”

OCI said the first phase, abating up to 40% of IFCo’s CO2 emissions from the ammonia production process (450,000 mt/y CO2 from the facility’s maximum production capacity of just under 1 million mt/y of ammonia), is a meaningful contribution to OCI’s overall target of achieving a 20% reduction in greenhouse gas intensity by 2030 and carbon neutrality by 2050.

OCI is also currently studying a phase two for this project, which would reduce post-combustion CO2 streams up to 700,000 mt/y and could materially store all of IFCo’s emissions. OCI is evaluating various capture technologies and expects phase two to be predicated on the premium associated with the carbon intensity reduction in its end products as those markets develop.

Capital expenditures for OCI’s scope, inclusive of the lump-sum turnkey contract, are expected to be $60 million over the period 2022–2025, and is included in OCI’s guidance for the group’s growth capex in 2023.

Under the agreement, Navigator will provide CO2 transportation and storage services on its carbon capture and storage system, the Heartland Greenway. The project is backed by BlackRock’s Global Energy & Power Infrastructure Fund III, which invests in essential, long-term infrastructure assets. Enerflex will engineer, fabricate, and install a modularized CO2 capture solution to capture IFCo’s CO2.

Mexican Green NH3 Project Moves Forward; Urea Planned

Europe, Green Ammonia, Green Hydrogen, Mexico, News, News Briefs, Urea

Tarafert, Amsterdam, the developer of a green ammonia production facility in Durango in northern Mexico, has signed an agreement with Ohmium International Inc., Freemont, Calif., for 343 megawatts of green hydrogen electrolyzers.

Delivery will happen over three tranches, with the first 69 megawatts to be delivered in 2025 on schedule for Tarafert’s project completion. The green hydrogen produced with solar energy will enable the production of up to 200,000 mt/y of green ammonia.  

“Utilizing green hydrogen to produce ammonia is a major advantage for our project,” said Jean Perarnaud, Tarafert CEO, in a Sept. 8 press release. “Green hydrogen means our ammonia will no longer be subject to the volatile price spikes and pollution inherent in fossil fuel use. Ohmium’s leading edge, cost-effective, modular PEM technology is the perfect choice for this project; it can scale rapidly and efficiently to support the production expansion in phases.”

“Ammonia shortages this year have shown the importance of countries developing their own production that doesn’t rely on fossil fuels,” said Ohmium CEO Arne Ballantine. “The Tarafert project is among the most ambitious in the world and we’re excited to be a part of it.”

Tarafert plans to eventually produce up to 1 million mt/y of granular urea at the site, according to its website, which it said would satisfy up to 50% of Mexico’s needs.

ICL Launches Biodegradable Coated Fertilizer Technology

Israel, News, News Briefs, Specialty

ICL, Tel Aviv, on Sept. 1 announced the launch of eqo.x release technology to provide a controlled release fertilizer (CRF) coating for urea. ICL said the coating rapidly biodegrades and was specifically designed to meet future European fertilizer standards set to go into effect in 2026.

ICL said this achievement is a key tool of both the European Farm to Fork strategy and the EU Soil Strategy for 2030, which aim to reduce nutrient loss by at least 50% by 2030.

The new technology will be applied to ICL’s CRF products for agricultural crops, including its Agromaster and Agrocote brands.

“ICL is proud to introduce our most advanced CRF coating, eqo.x rapidly biodegrading release technology, which will both help regulate the release of nutrients on a daily basis – by responding to each crops’ specific needs – and result in higher nutrient use efficiency,” said Elad Aharonson, President of Innovative Ag Solutions for ICL.

“Our innovative, sustainable, new technology will provide precision nutrition through a coating, which biodegrades more rapidly, and helps improve yield, reduce nutrient loss and simplify fertilizer application. Not only will this benefit farmers, it will also help the environment, as it will greatly reduce the leaching of nutrients into both the soil and groundwater, when compared to conventional fertilizers,” he added.

ICL expects to have this coating ready for farmers in the European Union by 2023 and, in order to meet expected market demand, is investing $20 million in a new production line for eqo.x release technology at its Heerlen facility in the Netherlands. Citing Fortune Business Insights, ICL said the global controlled release fertilizer market size was $2.3 billion in 2018 and projected to reach $3.86 billion by 2026, resulting in a CAGR of 6.37% during the forecast period.

Grannus Raising $32.5 M to Make Clean Projects to Construction Ready

Ammonia, Hydrogen, News, News Briefs, Southwest

Grannus LLC, Tucson, is raising $32.5 million to bring its portfolio of clean hydrogen and ammonia projects up to construction readiness. The company is advancing projects in California and Alaska (GM Aug. 12, p. 1). To raise the funds, the company has developed the “Grannus Token,” with the intent of sharing 75% of its net profits with token holders.

Grannus said its offtake agreements for the project planned near Stockton, Calif., are valued at $2 billion for 500 t/d of ammonia and 30 t/d of hydrogen. It said offtake agreements for a 4,000 t/d facility to be built in Alaska as part of Phase 2 are under negotiation.

Grannus said its “next generation” hydrogen and ammonia production offers significant advantages over current steam methane reformer-based designs, as it creates hydrogen that can be used as a feedstock in the production of ammonia and urea with effectively no emissions. The company said it has patents for its propriety process design in five countries (US, Canada, Mexico, Brazil, and Australia) and extensive relationships among technology providers, construction contractors, and commodity customers.

ABP, ADM Ink Immingham Deal

News, News Briefs, United Kingdom

Associated British Ports (ABP), London, reported that it has welcomed long-term customer ADM Agriculture in a new contract in the Humber region in the northeast UK. ABP has signed a three-year agreement with ADM for the import, handling, bagging, and processing of fertilizer at ABP’s Bulk Park at the Port of Immingham.

ABP expects extensive fertilizer volumes to come through the port, which is the UK’s largest port by volume of tonnage. ADM supplies a broad range of fertilizer products.

“The Port of Immingham is key to the ongoing development of our UK fertilizer business, and we are delighted to be in partnership with ABP,” said Calum Findlay, ADM Head of Fertilizer.

“We’re delighted to welcome ADM’s Fertilizer Division to the ABP family at the Port of Immingham,” said Simon Bird, Regional Director of the Humber ports. “ADM are a long-term customer of ours, a premier global human and animal nutrition company. and one of the world’s largest agricultural processors. This new partnership highlights the port’s key location in global trading and that we remain the port of choice for many.”

ABP’s Immingham Bulk Park offers more than 1.3 million sqm of undercover storage. In 2018 it won “Best Dry Bulk Port” at the International Bulk Journal awards.

AmmPower in Negotiations for First IAMM™ Sale

Canada, Green Ammonia, News, News Briefs

AmmPower Corp., Toronto, on Sept. 8 announced that it has entered into negotiations with a potential purchaser of its first IAMM™ (Independent Ammonia Making Machine) unit. It said subject to entering into a definitive agreement, it could be delivering its first unit within the US late in first-quarter 2023.

The company said this is a pivotal point for it to achieve commercialization and revenue generation, and the IAMM™ unit would be one of the first revenue generating initiatives globally in the green ammonia space.

Since the launch of IAMM™ pre-sales in July 2022, AmmPower said it has received many inquiries about the units, and has sent out budgetary quotes for both single-unit orders and multi-unit orders all over the world.

AmmPower expects to begin production of its IAMM™ units in October at its plant in Novi, Mich. The small units only require water and electricity to operate and produce 4 mt/d of green ammonia. Their target markets are independent distributors and retailers of ammonia used as fertilizer. AmmPower earlier suggested a price range of $3-$3.5 million.

Salt Lake Potash Sale Reported Near

Australia, News, News Briefs, Specialty, Sulfate of Potash

ASX-listed Salt Lake Potash (SO4), which went insolvent almost a year ago (GM Oct. 22, 2021) may be close to finding an offshore buyer, according to a Sept. 6 report by the Australian Financial Review.

The company had hoped to be Australia’s first sulfate of potash (SOP) producer with its Lake Way project in Western Australia, however, mounting debt and a delayed ramp-up eventually caused creditors to take over.

TFI Warns of Catastrophic Impact as Rail Strike Looms

Featured, News, Transportation, U.S.

Five of 13 rail unions have now reached tentative agreements with Class 1 railroads on a new contract that calls for 24% pay raises, back pay, and cash bonuses retroactive to Jan. 1, 2020 (GM Sept. 2, p. 1; Aug. 19, p. 28).

The remaining unions, which represent roughly 85,000 rail workers, remain at loggerheads with the railroads, however, and a strike or lockout could take place as early as Sept. 16, the end of the latest 30-day “cooling off” period. The unions and the railroads have been trying to reach a contract for more than two years.

The Association of American Railroads (AAR) estimates that a national rail shutdown would cost the US economy at least $2 billion a day. In an effort to head off a strike, US Labor Secretary Marty Walsh attended a special mediation session hosted on Sept. 7 by the National Mediation Board (NMB). Although Walsh’s comments were not made public, media reports said he warned both parties that a strike would imperil the nation’s fragile economy and exacerbate supply chain disruptions.

Federal law gives Congress the power to block or delay a railroad strike, allowing lawmakers to appoint arbitrators to fast-track a new contract or force the parties to abide by the recommendations made in August by the Presidential Emergency Board (PEB). The PEB, which was appointed by President Biden in July (GM July 15, p. 1), proposed a 22% wage increase, along with $5,000 in service recognition bonus payments, over the five-year life of the contract, retroactive to Jan. 1, 2020.

The Fertilizer Institute (TFI) on Sept. 7 sent a letter to Congressional leaders urging action to prevent a Sept. 16 shutdown of freight rail operations in the US and to begin preparations to implement the PEB recommendations.

“A disruption to freight rail operations would be catastrophic,” said TFI President and CEO Corey Rosenbusch in a Sept. 8 statement. “Over half of all fertilizer moves by rail year-round throughout the United States, and the timeliness and reliability of fertilizer shipments is absolutely critical. If farmers do not receive fertilizer, it results in lower crop yields, higher food prices, and more inflation for consumers.”

NMB-guided mediation was scheduled to continue on Sept. 8-9. The National Carriers’ Conference Committee (NCCC), which represents most Class I freight railroads in national collective bargaining, said on Sept. 8 that it is unwilling at present to extend the cooling-off period beyond Sept. 16. According to Railway Age, the NCCC said “extending the cooling off period would only inject additional uncertainty into the bargaining process.”

“A speedy resolution is paramount,” said TFI’s Rosenbusch. “With less than two weeks to go, carriers and shippers have already begun contingency planning, and if no agreement is reached soon rail shipments will have to wind down days before Sept. 16 to allow carriers to carefully clear their networks. Fertilizer shippers and their farmer customers want carriers and their unions to reach a compromise, and if necessary, Congress needs to act to prevent a devastating halt to our nation’s supply chain.”

ConocoPhillips, JERA, Uniper Collaborate on US Gulf Clean Ammonia Project

Ammonia, Featured, Germany, Houston, TX, Japan, News, U.S. Gulf

Three major energy companies – ConocoPhillips, Houston; JERA Americas Inc., a unit of Tokyo’s JERA Inc.; and Uniper SE, Dusseldorf – announced on Sept. 5 that they plan to collaborate to facilitate the development of a US Gulf-based clean ammonia plant with initial production of 2 million mt/y, with expansion potential up to 8 million mt/y.

The project, developed by JERA and ConocoPhillips, aims to produce hydrogen and convert it into clean ammonia to be supplied to JERA and Uniper under long-term sale and purchase agreements, with Europe as the primary initial export market, and Uniper targeting about 1 million mt/y of green ammonia from all sources by the end of the decade.

“JERA is committed to providing cutting edge solutions to the world’s energy issues and is actively working to establish both the ammonia and hydrogen value chains,” said Steven Winn, CEO of JERA Americas. “The combination of a skilled workforce, plentiful natural gas, abundant renewable resources, deep-water ports, and ideal CCS geology make the US Gulf Coast uniquely advantaged to produce the low carbon fuel to enable the Atlantic and Pacific energy markets transition.

“JERA and ConocoPhillips will be a low-cost ammonia supplier to domestic and international markets,” he continued. “We believe this project offers a unique opportunity to support Germany’s decarbonization efforts while advancing ammonia technology development for hydrogen distribution and industrial decarbonization.”

A project engineering study will be completed by year end to develop the first phase of the project, which will assess green and blue hydrogen opportunities. It is expected to reach commercial operation in the late 2020s including a complete certified carbon capture and storage (CCS) program.

JERA and Uniper also announced that they have entered into Memoranda of Understanding (MOU) on procurement and sale of LNG, as well as clean ammonia from the US.

The LNG MOU is aimed at improving the stability of energy supply in both Japan and Germany, through cooperation between the two companies. They are considering joint optimization of their respective LNG portfolios for supply to Japan and Germany and improvement of them for enhancement of the long-term stable supply.

JERA will contribute to providing solutions through the stable procurement of LNG to energy security issues in short- and medium-term and actively work on advancement of energy decarbonization in medium- to long-term.

Based on the MOU of the US clean ammonia procurement and sale, the two are collaborating to facilitate large-scale clean ammonia production projects in the US, such as the one just announced with ConocoPhillips.

Established in 2015, JERA (Japan’s Energy for a New Era) is an equal joint venture of two major Japanese electric companies, TEPCO Fuel & Power Inc. and Chubu Electric Power Co., and produces about 30% of all electricity in Japan. The company has a global reach, and is committed to achieving net zero CO2 emissions from its domestic and overseas businesses by 2050.

Uniper operates in more than 40 countries and plans for its power generation business in Europe to be carbon-neutral by 2035. The company, together with its main shareholder, Fortum, is also Europe’s third-largest producer of zero-carbon energy.

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