Denbury progresses with hydrogen-ammonia complex
Demand for blue ammonia is anticipated to grow significantly as a decarbonized energy source for hard-to-abate industries.
Denbury Carbon Solutions, LLC. has executed a CO2 Services Agreement with Clean Hydrogen Works.
Under the definitive agreement, Denbury will transport and sequester CO2 captured from Clean Hydrogen’s planned hydrogen-ammonia complex in Ascension Parish, Louisiana, which is anticipated to be built less than two miles from Denbury’s existing CO2 pipeline network.
The planned clean hydrogen-ammonia complex, Ascension Clean Energy, is expected to include two world-scale ammonia blocks with estimated ammonia production totalling 7.2 million tons of ammonia per year. Approximately 75% of the planned ammonia production volume is supported by letters of intent offtake agreements with high-quality purchasers.
The proposed facilities are to be constructed on a 1,700-acre site on the west bank of the Mississippi River in Donaldsonville, Louisiana, an ideal location for exports. The two ammonia blocks are currently projected to start up in a staged approach, with Block 1 production anticipated to commence in 2027. A final investment decision on the project is anticipated in 2024.
Key highlights of Denbury’s agreement with Clean Hydrogen include:
- Denbury has the exclusive right to transport and sequester all of the CO2 captured at ACE for a period of 12 years following startup, with multiple extension options.
- Captured CO2 volumes are estimated to be approximately 12 million metric tons per year (“mmtpa”), comprised of 6 mmtpa from each of the two ammonia blocks.
- Permanent, secure underground storage of the CO2 is anticipated in one or more of Denbury’s sequestration sites located in close proximity to Denbury’s CO2 pipeline infrastructure.
- Denbury has invested $10 million into the ACE project through an investment in Clean Hydrogen and has committed to invest another $10 million when certain project milestones are achieved.
With this agreement, the cumulative volumes of CO2 transportation and storage services agreements entered into by Denbury total 20 mmtpa, double the Company’s cumulative goal to reach 10 mmtpa by the end of 2022.
Chris Kendall, Denbury President and CEO, said, “We are excited to work with Clean Hydrogen Works and the State of Louisiana on this important clean energy project that aligns with our mission to sustainably deliver energy that the world needs.”
Mitch Silver, COO of Clean Hydrogen Works, said, “We look forward to working with industry leader Denbury to develop the ACE Project, using innovation to meet global demand for clean and affordable energy.”