Denbury and Nutrien Announce Agreement for Transportation and Storage of CO2 to be Captured from Nutrien’s Planned Clean Ammonia Project in Geismar, Louisiana
18 Mai 2022 - 11:00PM
Business Wire
Significantly expands longstanding and
successful CCUS partnership
Denbury Carbon Solutions, LLC, a wholly owned subsidiary of
Denbury Inc. (NYSE: DEN) (“Denbury”), and PCS Nitrogen Fertilizer
L.P., a wholly owned subsidiary of Nutrien Ltd. (TSX and NYSE: NTR)
(“Nutrien”), today announced that the parties have reached a
term-sheet agreement under which Denbury would transport and store
carbon dioxide (CO2) captured from Nutrien’s potential new clean
ammonia project at its Geismar, Louisiana location.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20220518006058/en/
Nutrien is evaluating its Geismar, Louisiana, ammonia facilities
as a potential site for significant new ammonia production to serve
growing demand in agriculture, industrial and emerging energy
markets. Nutrien is progressing the proposed project to the
front-end 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 annual
production capacity of 1.2 million metric tons of clean ammonia,
with approximately 1.8 million metric tons per year of CO2 to be
captured. Under the terms of the agreement, Nutrien would pay
Denbury for the transportation and sequestration of the associated
CO2 into Denbury’s secure underground containment sites. The
initial term of the agreement is 12 years, with up to two extension
terms of five years each.
“We are thrilled to expand our successful long-term partnership
with Nutrien through this world class project,” said Chris Kendall,
Denbury’s President and Chief Executive Officer. “We believe that
CCUS-enabled clean ammonia will be an important source of energy in
a lower-carbon future, and we are honored by the confidence and
trust that Nutrien has continued to place in Denbury to provide
this important service.”
“Nutrien is optimally positioned to supply global emerging clean
ammonia markets and grow a pathway for a decarbonized supply
chain,” said Raef Sully, Nutrien’s Executive Vice President and CEO
of Nitrogen and Phosphate. “We are pleased to partner with Denbury
on this initiative given our established track record of
cooperation. It is another example of how we are building on our
expertise in low-carbon ammonia to decarbonize the agriculture
industry while also developing a source of clean energy.”
This new agreement expands the companies’ longstanding efforts
to reduce atmospheric emissions by capturing industrial-sourced CO2
for permanent underground storage. In 2013, Nutrien and Denbury
began working together to transport CO2 captured from Nutrien’s
existing nitrogen facilities in Geismar, Louisiana, located less
than one mile from Denbury’s CO2 pipeline infrastructure, for use
in Denbury’s enhanced oil recovery operations. Since then, the
companies’ collective efforts have resulted in:
- Nearly 100% uptime and reliability in CO2 takeaway;
- Permanent underground storage of nearly 3 million metric tons
of CO2 (current rate of 0.3 million metric tons per year);
- More than 2 million barrels of carbon-negative or “blue” oil,
whereby more CO2 is injected in the ground to produce a barrel of
oil than the Scope 1, 2, and 3 emissions from that related
barrel.
This agreement was previously announced by Denbury as part of
its earnings release dated May 5, 2022. Inclusive of the agreement
between Denbury and Nutrien, the cumulative volume of Denbury’s CO2
transportation and storage agreements totals approximately seven
million metric tons per year. In parallel, Denbury has entered into
a number of agreements providing Denbury the exclusive rights to
develop secure underground CO2 sequestration sites in Louisiana,
Texas, and Alabama, with total potential capacity of over 1.4
billion metric tons. Denbury’s leadership position in CCUS is
supported by over 20 years of experience transporting and injecting
CO2 underground. Denbury is currently moving in excess of 14
million metric tons of CO2 annually in the United States through
its 1,300+ miles of CO2 pipelines, the largest CO2 pipeline network
in the world.
ABOUT NUTRIEN
Nutrien is the world's largest provider of crop inputs and
services, playing a critical role in helping growers increase food
production in a sustainable manner. Nutrien produces and
distributes approximately 27 million tonnes of potash, nitrogen and
phosphate products world-wide. With this capability and our leading
agriculture retail network, Nutrien is well positioned to supply
the needs of our customers. Nutrien operates with a long-term view
and is committed to working with our stakeholders to address our
economic, environmental and social priorities. The scale and
diversity of Nutrien’s integrated portfolio provides a stable
earnings base, multiple avenues for growth and the opportunity to
return capital to shareholders.
ABOUT DENBURY
Denbury is an independent energy company with operations and
assets focused on Carbon Capture, Use and Storage (CCUS) and
Enhanced Oil Recovery (EOR) in the Gulf Coast and Rocky Mountain
regions. For over two decades, the Company has maintained a unique
strategic focus on utilizing CO2 in its EOR operations and since
2012 has also been active in CCUS through the injection of captured
industrial-sourced CO2. The Company currently injects over four
million tons of captured industrial-sourced CO2 annually, with an
objective to fully offset its Scope 1, 2, and 3 CO2 emissions by
2030, primarily through increasing the amount of captured
industrial-sourced CO2 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
were developed over the last 20-plus years through its focus on CO2
EOR.
Follow Denbury on Twitter and LinkedIn.
This press release uses the term “agreement” to refer to both
executed definitive agreements and executed term sheets covering
various CCUS arrangements, such as the Nutrien agreement. These
arrangements are subject to technical and feasibility evaluations
and the building of new industrial facilities in future 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, along with the
results of Denbury’s pre-injection period tests and assessments.
These statements are based on engineering, geological, financial
and operating assumptions that Denbury believes are reasonable
based on currently available information; however, their
achievement are subject to a wide range of business risks, and
there is no assurance that these goals and projections can or will
be met. Actual results may vary materially. In addition, 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 assumes no obligation to update
these forward-looking statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20220518006058/en/
NUTRIEN CONTACTS: Jeff Holzman, VP Investor Relations,
306.933.8545 Megan Fielding, VP Brand & Culture Communications,
403.797.3015
DENBURY CONTACTS: Brad Whitmarsh, 972.673.2020,
brad.whitmarsh@denbury.com Beth Bierhaus, 972.673.2554,
beth.bierhaus@denbury.com
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