Jera Inks Tentative Agreements for Ammonia Offtake, Gulf Coast Hub Fueled by Natural Gas

日本開始點氨氣的科技樹了了

Jera Co. Inc., Japan’s leading power producer and one of the world’s top buyers of LNG, has signed two tentative agreements for ammonia supply that include exploring plans for a Gulf Coast production facility fed by low-carbon natural gas.?

Jera disclosed Monday memorandums of understanding (MOU) with a unit of Yara International ASA and CF Industries Holdings Inc. to potentially fulfill a tender it launched last year for up to 500,000 tons/year of low-carbon ammonia by 2027.?

If finalized, CF Industries CEO Tony Will said the agreements could mark “the first significant volume of what we believe will be substantial global demand for clean ammonia” as a fuel source for power generation.

Under the MOUs, the companies will study the ability to export large volumes of ammonia with the goal of inking a long-term offtake agreement from CF Industries’ Donaldsonville Complex in Louisiana and Yara’s facilities across the globe. The agreements could also result in joint investment in a 1 million metric ton/year (mmty) production hub on the Gulf Coast that would utilize supplies of natural gas and carbon capture and storage (CCS) capacity to produce ammonia with at least a 60% reduction in emissions.

CF Industries’ Donaldsonville Complex is currently under construction and is targeted to begin production up to 20,000 tons/y of ammonia produced with renewable energy by sometime next year. CF Industries has also started a front end engineering and design study on an ammonia facility northwest of New Orleans that would use natural gas coupled with CCS, referred to as blue ammonia.?

Yara, based in Norway, operates 12 shipping vessels and a network of 18 ammonia terminals and multiple production facilities across the world.?

Typically used as fertilizer, ammonia is being studied as an alternative fuel for the global energy transition because it produces no carbon dioxide when burned and has a higher energy density than some forms of hydrogen.?

Jera launched the tender last February as it operates a pilot program testing the ability to co-fire coal and ammonia at its plants. After reporting the pilot a success, Jera disclosed it plans to launch a demonstration project at its Hekinan Thermal Power Station this year.?

The Japanese utility has set a goal of transitioning all of its coal-fired plants to replace at least 20% of their fuel supply with lowcarbon ammonia by 2030. It’s aiming for its entire fleet to become coal free by 2050, when the company is also targeting its net-zero emission status.?

Jera is a joint venture company between Tokyo Electric Power Co. and Chubu Electric Power Co. Inc. It holds around 16 mmty of liquefied natural gas under long-term contracts, according?to data from Kpler. It also holds equity in terminals across the world, including Freeport LNG in Texas.?

The Gulf Coast has also been targeted for a potential hydrogen and ammonia facility by Chevron Corp, Air Liquide SA, LyondellBasell and Uniper SE. Jera announced a partnership last year with Chevron to pursue decarbonization projects, including CCS and other investments on the Gulf Coast.?

The latest agreements from Jera also follows a string of partnerships and frameworks with Japanese companies and U.S. stakeholders, including potentially exporting hydrogen and ammonia from existing LNG terminals on the Gulf Coast. Other plans outlined late last year include low-carbon fuel production hubs backed by natural gas in Alaska and the Midwest.?

As countries like Japan call for more ammonia supply, the world’s production of the low-carbon fuel is still largely sourced from natural gas. In 2021, around 72% of ammonia was produced with natural gas and 26% used coal, according to the Innovation for Cool Earth Forum. n