Denbury Carbon Solutions, LLC, a wholly owned subsidiary of Denbury Inc. (“Denbury”), and PCS Nitrogen Fertilizer L.P., a wholly owned subsidiary of Nutrien Ltd., announced that the parties have reached a term-sheet agreement under which Denbury would transport and store carbon dioxide (CO2) captured from Nutrien’s potential new clean ammonia project at its Geismar, Louisiana location.
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Nutrien is evaluating its Geismar, Louisiana, ammonia facilities as a potential site for significant new ammonia production to serve growing demand in agriculture, industrial and emerging energy markets. Nutrien is progressing the proposed project to the front-end engineering design phase, with a final investment decision expected to follow in 2023 and, if approved, full production by 2027. The new plant is expected to have annual production capacity of 1.2 million metric tons of clean ammonia, with approximately 1.8 million metric tons per year of CO2 to be captured. Under the terms of the agreement, Nutrien would pay Denbury for the transportation and sequestration of the associated CO2 into Denbury’s secure underground containment sites. The initial term of the agreement is 12 years, with up to two extension terms of five years each.
“We are thrilled to expand our successful long-term partnership with Nutrien through this world class project,” said Chris Kendall, Denbury’s President and Chief Executive Officer. “We believe that CCUS-enabled clean ammonia will be an important source of energy in a lower-carbon future, and we are honored by the confidence and trust that Nutrien has continued to place in Denbury to provide this important service.”
“Nutrien is optimally positioned to supply global emerging clean ammonia markets and grow a pathway for a decarbonized supply chain,” said Raef Sully, Nutrien’s Executive Vice President and CEO of Nitrogen and Phosphate. “We are pleased to partner with Denbury on this initiative given our established track record of cooperation. It is another example of how we are building on our expertise in low-carbon ammonia to decarbonize the agriculture industry while also developing a source of clean energy.”
This new agreement expands the companies’ longstanding efforts to reduce atmospheric emissions by capturing industrial-sourced CO2 for permanent underground storage. In 2013, Nutrien and Denbury began working together to transport CO2 captured from Nutrien’s existing nitrogen facilities in Geismar, Louisiana, located less than one mile from Denbury’s CO2 pipeline infrastructure, for use in Denbury’s enhanced oil recovery operations. Since then, the companies’ collective efforts have resulted.