Blue ammonia, which is produced from fossil fuels but with the resulting carbon captured and stored, could significantly accelerate the energy transition while green ammonia production at scale is becoming more mature. Copenhagen Infrastructure Partners’ St. Charles project will tap into that demand and the technology could open up further opportunities.
The most efficient way from A to B is not always the most obvious.
Blue ammonia is a low-carbon approach to ammonia production which combines traditional ammonia synthesis using natural gas with subsequent carbon capture and storage. Copenhagen Infrastructure Partners’ (CIP) St. Charles project, in Louisiana, is designed to produce about 2.8 million tons of ammonia annually, with a carbon footprint reduced by 85-95% compared to current ammonia production.
It is a new area for CIP and is set to play a major role in the energy transition, as the cost is very close to producing fossil fuel-based ammonia. The global ammonia market is 180 million tons, all produced from fossil fuels which emit CO2, and production of blue ammonia can significantly offset that.
We bought into St. Charles before the Inflation Reduction Act because we needed to better understand these blue projects and the role they could play. Now, the Inflation Reduction Act has further increased the chances of the project materializing. We believe blue and green ammonia will co-exist for many years, as we gradually transition from fossil-based production. We expect to reach a final investment decision relatively quickly on a large blue ammonia project like St. Charles, which makes it a faster step forward and at a price point that’s very close to fossil fuel-based ammonia production
CIP has acquired a majority stake in the St. Charles project, which will be developed alongside U.S.-based Sustainable Fuels Group (SFG), through its Energy Transition Fund (CI ETF I). The project is de-risked, with the site secured, detailed engineering with a preferred contractor and permitting in process with experienced local consultants.
CI ETF I focuses on clean hydrogen and other next generation renewable technologies to facilitate the decarbonisation of hard-to-abate sectors such as agriculture and transportation, and closed in August 2022 at the hard cap of EUR 3.0 billion. It is an Article 9 or “dark green” fund, with clearly defined sustainable investment objectives.
Located along the Gulf Coast, the first of St. Charles project’s two phases is expected to become operational in 2027.
It will use Topsoe’s industry leading SynCOR™ technology to produce blue ammonia with the lowest carbon intensity and is expected to reduce CO2 equivalent emissions by 90% compared to traditional ammonia production, thereby abating 5.0 million tons of CO2 per year – 2.5 million tons per each phase of the project. International-Matex Tank Terminals (IMTT), a terminal and logistics company, will provide ammonia storage and handling services.
This is a unique site with access to existing infrastructure, such as loading docks which allow for ocean-going ammonia vessels, multiple gas supply options and a power transition line. This opens up to global markets, and there are significant opportunities for blue ammonia in Europe and Asia
CIP is now looking for storage solutions for the captured carbon and is examining two potential sites near the St. Charles project. Discussions for long-term offtake agreements are continuing with buyers in Europe and Asia, particularly South Korea.
There are significant carbon taxes in Europe, which will make blue ammonia more competitive, and similar regulations are expected to be introduced in Japan and South Korea.
Blue ammonia is an additional clean energy source, which will play an essential role in easing and accelerating that transition
Across the world CIP is engaged in green energy and infrastructure projects. Here are a few of them.