UK industrial gases company Linde says it plans to invest US$1.8 billion to supply clean hydrogen to Dutch fertiliser giant OCI NV, the company responsible for developing what is being called the largest blue ammonia facility of its kind in Texas.
Linde said it will integrate a new complex into its existing Gulf Coast gas infrastructure. The complex will include autothermal reforming with carbon capture, sequestering more than 1.7 million tonnes/year of CO2 emissions, plus a large air separation plant.
“Linde’s capabilities are already enabling the transition to a low-carbon-intensity economy,” said Linde CEO Sanjiv Lamba. “Our strategy is to support decarbonisation by working with off-takers like OCI to safely and reliably supply low-carbon industrial gases at scale.”
As part of a long-term agreement, Linde will supply the hydrogen to OCI, which will upgrade it to produce blue ammonia at its 1.1 million tonnes/year facility in Beaumont, Texas. OCI broke ground on the facility in December and plans to begin operations in 2025.
The partnership formed as the world turns to low-carbon sources to meet energy needs and reduce emissions to slow global warming. Ammonia production represents about 15% to 20% of CO2 emissions from the chemical sector, according to the International Renewable Energy Agency. However, low-carbon ammonia production methods—such as using blue hydrogen—can reduce emissions.
While mostly used today to produce fertiliser, ammonia is also seen as a potential hydrogen carrier and a fuel for hard-to-abate sectors.
OCI plans to invest up to US$1 billion on its blue ammonia facility, which is being built adjacent to its existing integrated 1.4 million tonnes/year methanol-ammonia production facility in Beaumont and 1.8 million tonnes/year 50%-owned methanol joint venture Natgasoline.
Linde said it will also use its pipeline network to provide clean hydrogen to existing and new customers in the Gulf Coast area looking to decarbonise their operations while also supplying atmospheric and rare gases.
Linde credited the US Inflation Reduction Act (IRA) to helping position the company to secure more clean energy projects. Signed into law in 2022, the IRA includes nearly US$370 billion in incentives for clean energy and climate-related spending. Hydrogen incentives in the IRA include a 10-year production tax credit with a maximum value of US$3/kg for hydrogen produced with nearly no emissions.
The law also incentivises carbon sequestration, which is used for blue hydrogen. It provides a tax credit of US$85/tonne for sequestering CO₂ produced by industrial activity, up from US$50/tonne. It also adds a tax credit of US$180/tonne for direct air capture.