Yara Details Clean Ammonia Plans
The Norwegian group said at its capital markets day on Jun. 30 that clean ammonia “represents a massive opportunity that is projected to drive exponential, long-term market growth.”
Ammonia is expected to present a low-carbon option in four sizeable industry segments, notably shipping fuel, power generation, agriculture, and as a hydrogen carrier. Yara added that all clean ammonia volumes in new applications are likely to be traded internationally, underpinning exponential growth in the traded market from 18 million t in 2021 to an estimated 238 million t by 2050.
“YCA aims to significantly scale its leading global position as the world’s largest ammonia platform, driving the development of clean ammonia globally,” said CEO Magnus Krogh Ankarstrand, adding that it aims to partner with “likeminded industry leaders to unlock the blue and green [ammonia] value chains.”
The company intends to scale its integrated midstream ammonia platform while expanding both upstream and downstream. Plans include spending up to $400 million to expand its midstream capacity and establish a downstream presence by 2030.
The midstream growth plan will see selective investments in terminals and vessels, as well as co-investments and flexible ownership models, while YCA’s commercial organization will spearhead the development of new end-markets, with a focus on close co-operation with key customers.
Existing ammonia plants will remain with Yara, but YCA intends to establish new clean ammonia production. It said it is well-positioned to succeed in the upstream segment with an attractive project portfolio that is weighted towards blue projects in North America, where it is exploring several opportunities together with capital-light conversion of existing Yara production in Europe.
Overall, YCA is proposing to invest $1.5-1.8 billion in blue ammonia projects that in total are expected to produce roughly 2.1 million t by 2030. In addition, the HEGRA project in Porsgrunn, Norway – a joint venture with Aker Clean Hydrogen and Statkraft – may also contribute about 400,000 t of green ammonia by the end of the decade, although an investment decision is dependent on receiving sufficient government support.
In May, Yara said it was evaluating a potential initial public offering of YCA, after separating the business in February 2021. Going forward, YCA intends to establish a standalone capital structure that is independent from Yara, reinvesting any cash flow that it may generate. It expects to fund capital expenditures from other sources too, including debt and additional potential equity financing.
Author: Elaine Burridge, Freelance Journalist