CF Industries and Lotte to assess US-based clean ammonia production and long-term offtake into South Korea

Chicago-based ammonia producer CF Industries Holdings has signed a memorandum of understanding (MoU) with South Korean chemical company Lotte Chemical Corporation for a joint exploration of clean ammonia production and its long-term offtake into South Korea.

Illustration only; Archive; Courtesy of CF Industries

The MoU will serve as a framework for the companies to assess the joint development of and investment in a greenfield clean ammonia production facility in the US, including at CF Industries’ Blue Point Complex in Louisiana.

Additionally, the companies plan to quantify expected clean ammonia demand in South Korea for power generation, bunkering and other sectors, taking into account regulatory and policy requirements, as well as safety and environmental considerations. This workstream will confirm the scale of long-term offtake volume expectations for a potential clean ammonia facility.

Courtesy of CF Industries

As explained, CF Industries and Lotte chose the US as they believe it offers considerable advantages for clean ammonia production, including access to plentiful and low-cost natural gas, the regulatory and legal framework in place, and the geology suitable for permanent carbon sequestration.

The prospective ammonia facility would leverage carbon capture and sequestration technologies to reduce CO2 emissions from the ammonia production process to a level that meets or exceeds South Korea’s clean ammonia requirements.

“We are pleased to advance our relationship with LOTTE and leverage the world-class expertise of both companies to meet the substantial emerging demand for clean ammonia in South Korea”, said Tony Will, President and CEO of CF Industries Holdings, Inc. “We look forward to helping Lotte and South Korea meet their clean ammonia requirements as we continue to accelerate the world’s transition to clean energy.”

According to Lotte, this MoU is part of its efforts to develop a global clean ammonia supply chain to support its hydrogen energy business for global clean energy supply and carbon reduction growth. The company has established a plan to produce and sell 1.2 million tons of clean hydrogen by investing a total of 6 trillion won by 2030.

Jin-koo Hwang, Head of hydrogen energy business at Lotte Chemical, remarked: “In order to bolster the domestic hydrogen economy, it is important to secure a stable supply of clean hydrogen and ammonia, especially in overseas regions with abundant energy and low geopolitical risks. Through strategic collaboration with CF Industries, which has a long history and business experience, we will secure a production base in the USA and lead the global distribution channel.”

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On the other hand, CF Industries has commenced a front-end engineering and design (FEED) study to construct a greenfield clean ammonia facility utilizing CCS at its Blue Point Complex in Louisiana.

Additionally, the company is constructing North America’s first commercial-scale green ammonia capacity at its Donaldsonville Complex, enabling up to 20,000 tons of green ammonia production beginning in 2024.

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