CF Industries, JERA to Develop 1.4M Mt Green Ammonia Plant

CF Industries and JERA entered a joint development agreement to assess the development of green, low-carbon ammonia production capacity and evaluate a possible agreement to construct a 1.4 million metric ton capacity low-carbon ammonia plant at the Blue Point Complex in Louisiana.

“We are pleased to expand our relationship with JERA as our companies advance leading-edge decarbonization initiatives that will help JERA and Japan achieve their decarbonization goals,” said Tony Will, President and CEO, CF Industries Holdings. “We believe that JERA’s projects, which represent the first meaningful volume of what we believe will be substantial global demand for low-carbon ammonia as an energy source, will demonstrate the significant contribution ammonia can make to meet the decarbonization goals of hard-to-abate industries. We look forward to continuing to work closely with JERA and other stakeholders in Japan as regulatory requirements and government incentives regarding low-carbon ammonia are finalized.”

JERA is examining a 48% ownership stake in the project and an agreement to procure more than 500,000 metric tons of low-carbon ammonia per year—an effort to satisfy demand for low-carbon fuels in Japan. Both CF Industries and JERA previously signed a memorandum of understanding to explore the joint project development, sales, and purchase of low-carbon ammonia. The companies plan to execute a final investment decision for the project within a year, priming the plant for ammonia production by 2028.

“We are pleased to further advance our partnership with CF Industries,” said Yukio Kani, Global CEO & Chair, JERA. “Finding cutting-edge solutions to the world's energy issues requires commitment and partnership. With JERA's dedication to low-carbon fuel development and CF Industries' expertise as one of the leading ammonia producers, we are confident in making tangible progress toward realizing a low-carbon ammonia value chain, and ultimately ensuring a decarbonized energy supply that is sustainable, affordable, and stable."

CF Industries also completed an ammonia-related $1.675 billion acquisition in December of last year. It announced the closing of its purchase of Incitec Pivot Limited’s (IPL) ammonia production complex and its associated assets located in Waggaman, LA. CF Industries and IPL have allocated approximately $425 million of the purchase price to a long-term ammonia offtake agreement. This agreement will have CF Industries supply up to 200,000 tons of ammonia per year to IPL’s subsidiary, Dyno Nobel, at production economics.

Ammonia production complex in Waggaman, LA; Image Credits: IPL

In addition to its offtake agreement with IPL, CF Industries will maintain medium and long-term offtake agreements with two customers that signed prior to the acquisition. Carbon capture and sequestration technologies will be implemented at the site on an accelerated timeline, boosting the system’s low-carbon ammonia production and earning 45Q tax credits for sequestered CO₂.

Last month, JERA agreed to a project framework agreement (PFA) with ExxonMobil dedicated to exploring the development of a low-carbon hydrogen and ammonia production project in the United States—more specifically, at ExxonMobil’s low-carbon hydrogen production plant at the Baytown Complex in Houston, TX.

JERA will explore ownership participation in the project via purchase of the Baytown hydrogen production plant. The deal also considers JERA’s procurement of approximately 500,000 tons of low-carbon ammonia per year, which will be produced at the Baytown Complex and transported for demand in Japan.