... Denbury to Provide Carbon Capture Transportation for Nutrien Facility

Denbury to Provide Carbon Capture Transportation for Nutrien Facility in Louisiana

Denbury Carbon Solutions LLC has agreed to provide transportation and storage for a carbon capture project in Louisiana.

Denbury Carbon Solutions LLC is a wholly owned subsidiary of Denbury Inc. The company and PCS Nitrogen Fertilizer LP, a wholly owned subsidiary of Nutrien Ltd., announced May 18 that the parties have reached a term-sheet agreement under which Denbury would transport and store carbon dioxide captured from Nutrien’s potential new clean ammonia project at its location in Geismar, Louisiana.

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Nutrien is evaluating its ammonia facilities in Geismar 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.

“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.”

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 carbon dioxide to be captured. Under the terms of the agreement, Nutrien would pay Denbury for the transportation and sequestration of the associated carbon dioxide 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 CEO. “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.”

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 carbon dioxide 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 carbon 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 carbon dioxide underground. Denbury is currently moving in excess of 14 million metric tons of carbon dioxide annually in the United States through its more than 1,300 miles of carbon dioxide pipelines.

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