Yara International ASA, Oslo, has signed a Letter of Intent with state-owned hydropower company Statkraft AS and Norwegian renewable energy investment firm Aker Horizons, aimed at establishing Europe’s first large-scale green ammonia project in Norway.
Yara in December revealed its plans for 500,000 mt/y of green ammonia production in Norway through fully electrifying its Porsgrunn ammonia plant, and said it was seeking partners as well as government support for the project (GM Dec. 11, 2020).
The Norwegian group said the Porsgrunn plant is well set up for large-scale production and export, allowing Norway to quickly play a role in the hydrogen economy. Yara has an ongoing 5 MW green ammonia pilot plant at the Porsgrunn site operating in cooperation Norwegian hydrogen company NEL.
“Constructing a new ammonia plant and associated infrastructure is typically a capital-intensive process, but by utilizing Yara’s existing ammonia plant and associated infrastructure in Porsgrunn, valued at $450 million, the total capital requirement for the project is significantly reduced compared with alternative greenfield locations,” said Yara.
The project will likely require more than €1 billion ($1.2 billion), according to Bloomberg calculations based on current cost estimates for the technology and amount of hydrogen required. Electrolyzers are expected to get cheaper in the coming years as demand rises for clean hydrogen, which could help lower costs.
Yara said provided that power is available at the site and the required public co-funding is in place, the project could be realized within five-to-seven years.
The three partners plan to seek support from the Norwegian government and the European Union to kick start a marketplace that will drive demand, said Yara International President and CEO Svein Tore Holsether.
In addition to the Porsgrunn project, the three companies plan to explore the potential for green ammonia production in Northern Norway as a future opportunity.
Yara announced earlier this month that it is establishing a global Clean Ammonia division to capture growth opportunities “within carbon-free food solutions, shipping fuel, and other clean ammonia applications” (GM Feb. 12, p. 1).