CF to Invest $1.7B in Louisiana Ammonia and CCS Projects

Louisiana [United States]: CF Industries Holdings Inc. has agreed to fork over a whopping $1.7 billion for the Ammonia production complex of Incitec Pivot Ltd. (IPL), which is based in Waggaman, LA. This facility boasts a nameplate capacity of 880,000 tons per year of Ammonia, and CF plans on allocating roughly $425 million of the purchase price for a long-term offtake agreement where it will supply up to 200,000 tons per year of Ammonia to IPL’s Dyno Nobel subsidiary. The remaining $1.25 billion will be funded with cash on hand by CF.

ExxonMobil has been chosen to transport and store captured Carbon dioxide (CO2) from CF Industries' Waggaman facility in Vermilion Parish, Louisiana. This follows the favourable characteristics of the site for the addition of Carbon capture and sequestration (CCS) technologies to enable low-Carbon Ammonia production. EnLink Midstream LLC has also entered into an agreement with ExxonMobil to transport this CO2 via its pipeline network.

CF made headline news in January when they secured a memorandum of understanding with Jera Co. Inc. to bring up to 500,000 metric tons of Ammonia per year to the market. This was soon followed by the company clinching another deal with BP plc to buy 2.2 Bcf of certified natural gas for industrial manufacturing – a transaction said to be one-of-a-kind.

Currently, Ammonia produced at Waggaman facility is distributed ratably among three customers, including Dyno Nobel, with most of it being used in industrial applications.

CF is aiming to rapidly advance the implementation of Carbon Capture and Sequestration (CCS) at its Waggaman site in Jefferson Parish, Louisiana. This network development has the potential to significantly increase the production capacity of low-Carbon Ammonia at the complex, helping both Louisiana and the nation to achieve their climate goals. In addition, this expansion will qualify for 45Q tax credits for CO2 sequestration.

The integrated chemicals complex at Waggaman includes a 38,500-ton Ammonia storage tank. It offers an efficient delivery system, as Ammonia can be sent offsite through NuStar Pipeline, barge, truck or rail transport.