CF Industries announces joint venture with JERA Co., Inc., and Mitsui & Co., Ltd., for production and offtake of low-carbon ammonia

CF Industries Holdings, Inc. (NYSE: CF), the world’s largest producer of ammonia, announced that it has formed a joint venture with JERA Co., Inc. (JERA), Japan’s largest energy company, and Mitsui & Co., Ltd. (Mitsui), a leading global investment and trading company, for the construction, production and offtake of low-carbon ammonia.

Highlights

• Joint Venture Structure: Upon formation, CF Industries will hold 40% ownership, JERA 35% ownership, and Mitsui 25% ownership in the joint venture.(1)

  
  

• Low-Carbon Ammonia Production Facility Construction: The joint venture will construct at CF Industries’ Blue Point Complex in Louisiana an autothermal reforming (ATR) ammonia production facility with a carbon dioxide (CO2) dehydration and compression unit at the site to prepare captured CO2 for transportation and sequestration. The estimated cost for the ammonia production facility is approximately $4 billion, which will be funded by each partner according to their ownership percentage.

  
  

• Low-Carbon Ammonia Production Capacity: The low-carbon ammonia production facility will have an annual nameplate capacity of approximately 1.4 million metric tons, which would be the largest ammonia production facility by nameplate capacity in the world. Production of low-carbon ammonia is expected to begin in 2029.

  
  

• Scalable Infrastructure: CF Industries will build and operate scalable infrastructure at the Blue Point site to supply the ammonia production facility with services, including product storage and loading. CF Industries will invest approximately $550 million for these facilities and receive ongoing services revenue from the joint venture ammonia production facility.

  
  

• Operations: CF Industries will be responsible for the operation and maintenance of the ammonia production facility.

  
  

• Ammonia Offtake: Product offtake will be handled independently by the three companies according to their ownership percentage.

  
  

• Sequestration of Carbon Dioxide (CO2): 1PointFive, a carbon capture, utilization, and sequestration (CCUS) company and subsidiary of Occidental (NYSE: OXY), will transport and sequester approximately 2.3 million metric tons of CO2 annually at 1PointFive’s Pelican Sequestration Hub in Louisiana.

″CF Industries is proud to partner with global leaders JERA and Mitsui to build the leading low-carbon ammonia production facility in the world,″ said Tony Will, president and chief executive officer, CF Industries Holdings, Inc. ″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.″

Yukio Kani, JERA Global CEO and Chair said, ″Collaboration and partnership are at the heart of JERA’s strategy to achieve our decarbonization goals. This Blue Point project is a testament to the strong alliances we are building to advance low-carbon solutions. The U.S. remains a cornerstone market for JERA, and this initiative underscores our long-term commitment to expanding our presence with diversified and sustainable energy projects. As we move forward, we will continue to accelerate the availability of low-carbon fuels and develop their supply chains, driving meaningful progress toward a more stable and cleaner energy future.″

Mr. Kenichi Hori, President and Chief Executive Officer of Mitsui & Co., Ltd, said, ″We are excited to announce the achievement of this significant milestone together with CF Industries and JERA to invest in this large-scale low-carbon ammonia project in Louisiana. Mitsui will establish a low-carbon ammonia value-chain worldwide by leveraging its presence in the US gas value chain from natural gas to chemicals including this project, and our strength and track record in the global trading of ammonia. We aim to lower carbon emissions across various industries through investment in projects of this kind.″

Greenfield Low-Carbon Ammonia Capacity Construction Overview

The companies estimate that the cost of the low-carbon ATR ammonia production facility with CCS technologies will be approximately $4 billion. Approximately half of the estimated cost is related to materials that will be imported to the United States, with the majority of imported materials expected to arrive in Louisiana in three years. The companies will divide the cost of the ammonia production facility engineering, procurement and construction according to their ownership percentage.

Pre-construction activities and engineering evaluations will begin in 2025 at CF Industries’ Blue Point Complex in Ascension Parish, Louisiana. Construction of the ammonia production facility is expected to begin in 2026, with low-carbon ammonia production expected in 2029.

The ammonia production facility is designed with an annual nameplate capacity of approximately 1.4 million metric tons and is expected to capture greater than 95% of carbon dioxide generated from the production of ammonia. CF Industries will have operations and maintenance responsibility under a contract with the joint venture.

Additionally, CF Industries will build and operate scalable infrastructure at the Blue Point site to supply the ammonia production facility with services including product storage and loading. CF Industries will invest approximately $550 million for these facilities and receive ongoing services revenue from the joint venture ammonia production facility.

Carbon Capture and Sequestration Overview

1PointFive will provide transportation and sequestration of CO2 for the joint venture. The ammonia production facility is expected to capture, compress and dehydrate approximately 2.3 million metric tons of CO2 annually. 1PointFive will then transport the CO2 and permanently sequester it in a Class VI well at its Pelican Sequestration Hub in Louisiana, which has taken final investment decision and is moving through the development process. 1PointFive is leveraging Occidental’s more than 50 years of experience managing and safely storing up to 20 million metric tons of CO2 per year.

″CF Industries and its partners’ confidence in our Pelican Sequestration Hub is a validation of our expertise managing carbon dioxide and how we collaborate with industrial organizations to become their commercial sequestration partner,″ said Jeff Alvarez, President of 1PointFive Sequestration. ″By working together, we can unlock the potential of American manufacturing and energy production, while advancing industries that deliver high-quality jobs and economic growth.″

The joint venture expects to qualify for tax credits under Section 45Q of the Internal Revenue Code, which provides a tax credit per metric ton of carbon dioxide permanently sequestered.

EPC Partners

The joint venture has awarded the engineering, procurement, and module fabrication contract to Technip Energies, which will perform engineering and fabrication of the equipment and modules required for the low-carbon ammonia production facility. Technip Energies will work with Topsoe, to which the joint venture awarded the process license for their low carbon (blue) SynCOR ATR ammonia plant technology.

(1) JERA has a conditional option to reduce its ownership percentage that expires on December 31, 2025. If the specified condition is met, JERA can reduce its ownership below 35% but not lower than 20%. CF Industries would have the right and obligation to increase its ownership by the same amount that JERA reduces.