Linde continued expanding its position in the US hydrogen economy Feb. 6 when it announced plans to build a $1.8 billion blue hydrogen facility on the Texas Gulf Coast designed to supply ammonia production.
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The blue hydrogen plant, which will be located in Beaumont, Texas, is slated to begin production in 2025. It's primary offtaker will be OCI, the Dutch fertilizer manufacturer currently building a blue ammonia facility in Beaumont expected to produce 1.1 million mt/year of ammonia.
Platts, part of S&P Global Commodity Insights, assessed the price of conventional ammonia produced on the US Gulf Coast at $780/mt Feb. 3. Meanwhile, the premium for low-carbon blue ammonia with a carbon capture rate of 90% was assessed at $23.60/mt, suggesting a blue ammonia price of around $804/mt. Blue ammonia premiums recently dipped to $23.05/mt on Jan. 30, which is the lowest point premium prices have reached since Platts began assessing blue ammonia in April 2022.
The Linde facility will produce blue hydrogen using autothermal reforming – a process that produces hydrogen by reacting methane with oxygen and steam – paired with carbon capture. The company says the facility will sequester over 1.7 million mt/year of CO2.
As the Linde facility will be integrated within the company's existing Gulf Coat pipeline network, Linde will also market the plant's blue hydrogen to other downstream customers in the region wanting to decarbonize their operations.
"Our strategy is to support decarbonization by working with off-takers, like OCI, to safely and reliably supply low-carbon industrial gases at scale," Linde CEO Sanjiv Lamba said. "With Linde's track record in successfully executing complex projects, its extensive pipeline network, and support from the US Inflation Reduction Act, the company is well positioned to secure many more clean energy projects."
OCI broke ground on its nearly $1 billion blue ammonia facility in December 2022. While the project will begin with a production capacity of 1.1 million mt/year in 2025, it has the space to double that capacity in the future. The blue ammonia will be used for both domestic fertilizer production and international exports.
The facility increases OCI's existing presence in Beaumont. It is being built alongside OCI's methanol-ammonia plant with a 1.4 million mt/year capacity, and a 1.8 million mt/year methanol facility, which OCI owns jointly with Natgasoline.
"The Beaumont facility will allow us to build and strengthen our world-leading blue ammonia and clean fuels platform, supplying both the U.S. and export markets with blue ammonia, an ideal solution to decarbonize hard-to-abate sectors such as agriculture, power and marine fuels at a competitive cost," said OCI CEO Ahmed El-Hoshy.