Denbury and Nutrien Announce Agreement for Transportation and Storage of CO2 to be Captured from Nutrien’s Clean Ammonia Project in Geismar, Louisiana
PLANO, Texas and SASKATOON, Saskatchewan–(BUSINESS WIRE)–Denbury Carbon Solutions, LLC, a wholly owned subsidiary of Denbury Inc. (NYSE: DEN) (“Denbury”), and PCS Nitrogen Fertilizer LP, a wholly owned subsidiary of Nutrien Ltd. (TSX and NYSE: NTR) (“Nutrien”), today announced that the parties have entered into an agreement whereby Denbury will transport and store carbon dioxide (CO2) from Nutrien’s potential new clean ammonia project at its Geismar, Louisiana site.
Nutrien is evaluating its ammonia facility in Geismar, Louisiana as a potential site for significant new ammonia production to meet growing demand from emerging agricultural, industrial and energy markets. Nutrien is advancing the proposed project to the initial 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 a capacity annual production of 1.2 million metric tons. of clean ammonia, with approximately 1.8 million metric tons of CO per year2 be captured. Under the terms of the agreement, Nutrien would pay Denbury for the transportation and sequestration of the associated CO2 in Denbury’s secure underground containment sites. The initial term of the agreement is 12 years, with up to two extensions of five years each.
“We are delighted to extend our successful, long-term partnership with Nutrien through this world-class project,” said Chris Kendall, President and CEO of Denbury. “We believe that CCUS-enabled clean ammonia will be an important source of energy in a low-carbon future, and we are honored by the continued confidence Nutrien places in Denbury to provide this important service.”
“Nutrien is uniquely positioned to supply emerging global clean ammonia markets and lead the way to a decarbonized supply chain,” said Raef Sully, Executive Vice President and CEO of Nutrien and Phosphate. “We are delighted to partner with Denbury on this initiative given our established track record of cooperation. It’s another example of how we’re leveraging our expertise in low-carbon ammonia to decarbonize the agriculture industry while developing a clean energy source.
New Agreement Expands Companies’ Longstanding Efforts to Reduce Air Emissions by Capturing Industrial CO2 for permanent underground storage. In 2013 Nutrien and Denbury began working together to transport CO2 captured from Nutrien’s existing nitrogen facility in Geismar, Louisiana, located less than a mile from Denbury CO2 pipeline infrastructure, for use in Denbury’s enhanced oil recovery operations. Since then, the collective efforts of companies have resulted in:
Nearly 100% CO availability and reliability2 take away;
Permanent underground storage of nearly 3 million tonnes of CO2 (current rate of 0.3 million metric tons per year);
More than 2 million barrels of carbon negative or “blue” oil, where more CO2 is injected into the ground to produce a barrel of oil that scope 1, 2 and 3 emissions from that associated barrel.
This agreement was previously announced by Denbury as part of its May 5, 2022 earnings release. Including the agreement between Denbury and Nutrien, Denbury’s cumulative CO volume2 transportation and storage agreements total approximately seven million metric tons per year. In parallel, Denbury entered into a number of agreements granting Denbury exclusive rights to develop secure underground CO2 sequestration sites in Louisiana, Texas and Alabama, with a total potential capacity of over 1.4 billion metric tons. Denbury’s leadership position in CCUS is backed by over 20 years of experience in CO transport and injection.2 underground. Denbury currently moves over 14 million metric tons of CO2 annually in the United States through its more than 1,300 miles of CO2 pipelines, the largest CO2 network of pipelines around the world.
Nutrien is the world’s largest supplier of agricultural inputs and services, playing a vital role in helping producers increase their food production in a sustainable way. Nutrien produces and distributes approximately 27 million tonnes of potash, nitrogen and phosphate products worldwide. With this capability and our primary agricultural retail network, Nutrien is well positioned to meet the needs of our customers. Nutrien operates with a long-term vision and is committed to working with our stakeholders to meet our economic, environmental and social priorities. The breadth and diversity of Nutrien’s integrated portfolio provides a stable revenue base, multiple avenues for growth and the ability to return capital to shareholders.
Denbury is an independent energy company with operations and assets focused on carbon capture, utilization and storage (CCUS) and enhanced oil recovery (EOR) in the Gulf Coast and Rocky Mountain regions. For more than two decades, the company has maintained a unique strategic focus on the use of CO2 in its EOR operations and since 2012 is also active in the CCUS via the injection of captured CO of industrial origin2. The Company currently injects more than four million tons of captured CO of industrial origin2 annually, with the objective of full offsetting of its Scope 1, 2 and 3 CO2 by 2030, mainly by increasing the amount of captured CO of industrial origin2 used in its operations. For more information about Denbury, visit www.denbury.com.
The Denbury Carbon Solutions team was formed in January 2020 to advance Denbury’s leadership in the anticipated high growth CCUS industry, leveraging Denbury’s unique capabilities and assets that have been developed over the past 20 years. and more thanks to its concentration on CO2 EOR.
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This press release uses the term “agreement” to refer to both signed definitive agreements and signed term sheets covering various CCUS agreements, such as the Nutrien Agreement. These arrangements are subject to technical and feasibility assessments and the construction of new industrial facilities in the coming years.
This press release contains forward-looking statements that involve risks and uncertainties, including the ultimate construction and operation of new industrial facilities, and the nature and extent of nearby sequestration sites, as well as the results of Denbury pre-injection tests and assessments. These statements are based on engineering, geological, financial and operational assumptions that Denbury believes are reasonable based on currently available information; however, their achievement is subject to a wide range of business risks, and there can be no assurance that such objectives and projections can or will be achieved. Actual results may vary significantly. Further, any forward-looking statements represent Denbury’s estimates only as of today and should not be relied upon as representing its estimates as of any future date. Denbury undertakes no obligation to update these forward-looking statements.