Denbury Carbon Solutions and PCS Nitrogen Fertilizer L.P., a wholly owned subsidiary of Nutrien Ltd., reached a term-sheet agreement under which Denbury would transport and store CO2 captured from Nutrien’s potential new clean ammonia project at its Geismar, La., location on May 18, a press release announced.
Previously announced by Denbury on May 5, this new agreement expands the companies’ longstanding efforts to reduce atmospheric emissions by capturing industrial-sourced CO2 for permanent underground storage. Nutrien is evaluating its Geismar ammonia facilities as a potential site for significant new ammonia production to serve growing demand in agriculture, industrial and emerging energy markets.
Inclusive of the agreement, the cumulative volume of Denbury’s CO2 transportation and storage agreements totals approximately seven million metric tons per year. Additionally, Denbury has entered into a number of agreements providing the company with the exclusive rights to develop secure underground CO2 sequestration sites in Louisiana, Texas and Alabama, with total potential capacity of over 1.4 Bmt.
“Nutrien is optimally positioned to supply global emerging clean ammonia markets and grow a pathway for a decarbonized supply chain,” Nutrien executive vice president and CEO of nitrogen and phosphate Raef Sully commented in the release. “We are pleased to partner with Denbury on this initiative given our established track record of cooperation. It is another example of how we are building on our expertise in low-carbon ammonia to decarbonize the agriculture industry while also developing a source of clean energy.”
Nutrien is progressing the proposed project to the front-end engineering design phase, with a final investment decision expected to follow in 2023 and, if approved, full production by 2027. The new plant is expected to have annual production capacity of 1.2 MMmt of clean ammonia, with approximately 1.8 MMmt/year of CO2 to be captured.
Under the terms of the agreement, Nutrien would pay Denbury for the transportation and sequestration of the associated CO2 into Denbury’s secure underground containment sites. The initial term of the agreement is 12 years, with up to two extension terms of five years each.
“We are thrilled to expand our successful long-term partnership with Nutrien through this world class project,” Denbury president and CEO Chris Kendall added. “We believe that CCUS [carbon capture, utilization and storage]-enabled clean ammonia will be an important source of energy in a lower-carbon future, and we are honored by the confidence and trust that Nutrien has continued to place in Denbury to provide this important service.”
In 2013, Nutrien and Denbury began working together to transport CO2 captured from Nutrien’s existing nitrogen facilities in Geismar, located less than one mile from Denbury’s CO2 pipeline infrastructure, for use in Denbury’s enhanced oil recovery operations.
Since then, the companies’ collective efforts have resulted in nearly 100% uptime and reliability in CO2 takeaway and permanent underground storage of nearly 3 MMmt of CO2 (current rate of 0.3 MMmt/year), as well as more than 2 MMbbl of carbon-negative or “blue” oil, whereby more CO2 is injected in the ground to produce a barrel of oil than the Scope 1, 2 and 3 emissions from that related barrel.
Based in Saskatoon, Saskatchewan, Nutrien is the world's largest provider of crop inputs and services, producing and distributing approximately 27 million tonnes of potash, nitrogen and phosphate products world-wide to play a critical role in helping growers increase food production in a sustainable manner.
2022-11-23 - CNOOC has hired JPMorgan to advise it on a potential exit from its interests in U.S. shale gas assets, which could raise around $2 billion, the sources familiar with the matter said.
2022-10-27 - Industry leaders shared insight during a recent hydrogen conference on the need for hydrogen infrastructure to help reach decarbonization goals.
2022-11-08 - "The Alaska Hydrogen Hub concept anticipates using $850 million in DOE funding along with $3.75 billion in private-sector funds, backed by offtake agreements from hydrogen customers in the U.S. and Asia," the Alaska Gasline Development Corp. said.
2022-11-17 - Former BP chief and 8 Rivers Capital CEO share insight on decarbonization investments as well as problems and solutions to lowering emissions.
2022-09-20 - Ed Graham, vice president at Exxon Mobil’s Low Carbon Solutions, said he believes decarbonization presents an “exciting, but also quite daunting” task during a recent industry presentation detailing the company’s ongoing initiatives on the U.S. Gulf Coast.