April 3, 2023 [Houston Business Journal] – Canada-based Enbridge Inc. (NYSE: ENB), which has a major presence in Houston, is teaming up with a new partner for its low-carbon plans along the Texas Gulf Coast.
Enbridge and Norway-based Yara Clean Ammonia, a Yara International ASA company, have signed a letter of intent to develop and construct a low-carbon blue ammonia production facility at the Enbridge Ingleside Energy Center near Corpus Christi. The companies will be equal partners in the proposed facility.
Yara is the world’s largest ammonia distributor, the companies said, and is expected to contract the full offtake volume from the production facility, which boosts the project’s commercial viability. The company has 15 ships and access to 18 ammonia terminals as well as multiple ammonia production and consumption sites worldwide. Magnus Krogh Ankarstrand, president of Yara Clean Ammonia, said the company is working to develop project opportunities in the U.S.
The proposed production facility is expected to start up in 2027 or 2028 and be able to produce 1.2 million to 1.4 million tons of low-carbon ammonia annually. The total project investment currently is expected to be between $2.6 billion and $2.9 billion.
The companies estimate about 95% of the carbon dioxide generated from the production process will be captured and transported to permanent geologic storage nearby. Carbon capture is an important component in the production of so-called “blue” hydrogen and ammonia.
The process starts with using natural gas to produce hydrogen and CO2, the latter of which is captured and stored. The blue hydrogen is then used to create ammonia. The proposed facility is expected to use a process called autothermal reforming to produce the hydrogen and CO2.
Enbridge’s Texas Eastern Transmission Pipeline is expected to deliver the feedstock gas for the production process. Enbridge also is working with Oxy Low Carbon Ventures, part of Houston-based Occidental Petroleum Corp. (NYSE: OXY), on a possible CO2 sequestration hub nearby, which could store the ammonia production facility’s captured CO2.
“Enbridge and Yara will utilize their complementary strengths to develop and execute the project,” the companies said. “Yara’s industry-leading experience in ammonia development, production, operations and distribution, combined with Enbridge’s large-scale infrastructure development expertise and world-class (Enbridge Ingleside Energy Center) deep-water docks and export platform, will be critical to advancing the project from development through to commercial operation.”
A similar deal with Denver-based Humble Midstream LLC was announced in May 2022, but Humble is no longer part of the project, an Enbridge spokesperson confirmed. Some project details, including the estimated cost, have also been updated.
“Humble stepping out at this time allowed for greater certainty of commercialization and provided the best value to Enbridge, Yara, and Humble,” Enbridge said in a statement to the Houston Business Journal.
Enbridge acquired the Ingleside Energy Center, the country’s largest crude export terminal by volume, from Houston-based Moda Midstream LLC in a $3 billion deal in 2021. Enbridge had been interested in acquiring the site for years, an executive told the Houston Business Journal in September 2021.
Beyond the sheer scale of the facility, Enbridge also saw potential for the former U.S. Navy station-turned-export-terminal to host projects more in line with the energy transition than with legacy oil and gas operations, the executive said at the time.
An Enbridge subsidiary has proposed building an 85-megawatt solar-power generating facility on land adjacent the Enbridge Ingleside Energy Center.
“EIEC is well positioned to become the most sustainable export terminal in North America through low-carbon fuel production, carbon capture and solar self-power,” said Colin Gruending, an executive vice president of Enbridge and its liquids pipelines president.
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