$4B blue ammonia plant set for Louisiana

A joint venture of three industrial, energy and finance heavyweights plans to build a $4 billion “blue” ammonia plant in Donaldsonville, Louisiana.

CF Industries Holdings, the world’s largest ammonia producer, formed the JV with Japan’s largest energy company, Jera, as well as investment and development giant Mitsui & Co. to build the Blue Point Complex. The trio will construct facilities to produce and offtake ammonia at the site, located in Ascension Parish, according to an April 8 release from Northbrook, Illinois-based CF Industries.  

CF Industries already operates the world’s largest existing ammonia and nitrogen plant in Donaldsonville, according to the Louisiana Illuminator.

The JV will build an autothermal reforming ammonia production facility that is expected to produce 1.4 million metric tons of blue ammonia each year for export. The team will also construct a carbon dioxide dehydration and compression unit at the site to prepare captured CO2 for transportation and sequestration, according to the release.

Blue ammonia is typically produced by extracting hydrogen from methane gas, and unlike “gray” or conventional ammonia, uses carbon capture and storage to reduce overall carbon emissions.

The project is expected to generate 1,500 construction jobs, local news outlet WBRZ reported. It will be funded by each partner according to their ownership percentage, per the release. CF Industries will hold 40%; JERA, 35%; and Mitsui, 25%. 

The global ammonia market is on track to triple in size by 2050, according to the International Renewable Energy Agency. Ammonia has been widely used in fertilizer in the past century, and could become a significant clean fuel source.

“Our joint venture represents tangible progress towards building a reliable and affordable low-carbon ammonia value chain to meet what we expect to be robust global demand for low-carbon ammonia for both traditional and new applications,” said Tony Will, president and CEO of CF Industries, in the release.

The Blue Point project is one of at least 14 proposed lower-carbon ammonia projects announced in recent years, mostly along the Gulf Coast, driven in part by federal tax credits for carbon capture and storage in the Inflation Reduction Act, according to Baton Rouge Public Radio. However, another blue ammonia plant planned for St. Charles Parish, priced at $4.6 billion, is facing opposition from residents over pollution concerns.

The key difference in blue and green ammonia fuel is sustainability: Blue ammonia production relies on methane gas or other fossil fuels, while green ammonia uses hydrogen obtained through a process powered by renewable energy sources including solar and wind, so it can be almost carbon-free, according to Energy Tracker Asia. Even with carbon capture technology, the creation of blue ammonia results in net CO2 emissions.

The Blue Point project entails transporting and sequestering approximately 2.3 million metric tons of CO2 annually at Houston-based carbon capture company 1PointFive’s Pelican Sequestration Hub in Louisiana, according to the release.

Pre-construction activities and engineering evaluations are set to begin this year and construction is expected to start in 2026. Ammonia production is expected to begin in 2029.