Nutrien plans to build world's largest clean ammonia plant in Louisiana by 2024

Nutrien, one of the largest producers of potash and nitrogen fertilizers, has struck a deal with Denbury Carbon Solutions to handle captured emissions from Nutrien's planned Louisiana ammonia facility – a project that the company says will be the largest clean ammonia plant in the world.

Under the agreement, announced May 18, Denbury would transport 1.8 million mt/year of CO2 captured from the ammonia plant in Geismar, Louisiana to a saline aquifer roughly 10 miles away near Donaldsonville, Louisiana. The CO2 will be stored in the aquifer permanently.

Nutrien, a Canadian company, said the $2 billion plant will capture at least 90% of CO2 emissions as it strives to serve growing demand from agriculture, industrial and emerging energy markets. It's expected to have a production capacity of 1.2 million mt/year of clean ammonia produced using an auto thermal reforming technology, a process that uses a natural gas feedstock.

Mitsubishi Corporation has already signed a letter of intent to offtake up to 40% of the plant's ammonia production to deliver to Asian fuel markets once construction is complete.

A final investment decision is expected in 2023 followed by construction beginning in 2024. Full production would begin in 2027.

"Our commitment to the development and use of both low-carbon and clean ammonia is prominent in our strategy to provide solutions that will help meet the world's decarbonization goals, while sustainably addressing global food insecurity," Nutrien CEO Ken Seitz said in a statement. "Leadership in clean ammonia production will play a key role in achieving our 2030 scope 1 and 2 emissions reduction goals."

Nutrien's agreement with Denbury builds on an existing arrangement between the companies in which Denbury offtakes 300,000 mt/year of CO2 captured from Nutrien's existing nitrogen plants in Louisiana – an arrangement that has been in place for around a decade.

Under that agreement, Denbury transports the CO2 via its 320-mile Green Pipeline to oil fields in the Houston area for enhanced oil recovery.

"We are thrilled to expand our successful long-term partnership with Nutrien through this world class project," said Denbury CEO Chris Kendall. "We believe that CCUS-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 addition to Denbury's Green Pipeline, the company also operates a 183-mile CO2 pipeline that transports CO2 from the Jackson Dome in central Mississippi to enhanced oil recovery operations throughout the Gulf Coast via a connection to the Green Pipeline.

Last year, Denbury Vice President Dan Cole said the company is aiming for a carbon-negative Gulf Coast operations by the end of the decade.

The US Gulf Coast has been identified by Denbury and other carbon management firms as primed for the proliferation of carbon sequestration operations due to its geological characteristics, and they expect the coast to play an outsized role in the global carbon business.

Carbon management is quickly becoming a lucrative business for Denbury Carbon Solutions, a subsidiary of the Texas oil producer Denbury. Denbury currently spends about $70 million per year buying carbon from emitters to use for enhanced oil recovery operations, a company spokesperson said in September. But government incentives and corporate net zero commitments are now prompting emitters to pay Denbury to offload their carbon. Denbury said last year that it expects carbon to transition from a cost to a revenue source by 2024.