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OCI NV low-carbon ammonia project underway in Beaumont; KBR nabs contract
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OCI NV owns an ammonia and methanol plant near Beaumont, Texas.
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OCI NV owns an ammonia and methanol plant near Beaumont, Texas.
OCI PARTNERS LP
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Oil & gas
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Architecture & Engineering
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Renewable Energy
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KBR Inc.
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Doug Kelly
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Nassef Sawiris
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By Chris Mathews – Reporter, Houston Business Journal
Oct 4, 2022
Fertilizers company OCI NV is expanding low-carbon ammonia production at its facility near Beaumont, Texas, and one of Houston's largest publicly traded companies will play a role.
The Amsterdam-based chemicals manufacturer is constructing a clean ammonia project in Beaumont capable of producing 1.1 million tons per annum, OCI announced in September. The company said enhanced tax credits for carbon dioxide sequestration passed under the Inflation Reduction Act made the blue ammonia project more attractive for OCI.
The detailed engineering and procurement work for the project began earlier this year, OCI said. The company tapped Italian engineering group Maire Tecnimont for the ammonia project's engineering and procurement work.
Tecnimont awarded Houston-based KBR Inc. (NYSE: KBR) a technology contract for OCI's blue ammonia plant in Beaumont, the companies announced Oct. 3. KBR will supply technology licensing, basic engineering design, equipment and other services for the project.
"We are excited to continue to build on our strong relationship with OCI NV and Maire Tecnimont to deliver our market-leading and proven ammonia technology for this energy transition project," said KBR Technology President Doug Kelly.
Construction is underway, and production is being targeted for the first quarter of 2025. OCI said land and utilities have also been sized to allow the company to double its capacity with another 1.1 Mtpa blue ammonia line in the future.
Meanwhile, OCI announced plans this summer to triple the ammonia throughput capacity to 1.2 Mtpa at its import terminal in Rotterdam, the Netherlands. The company aims to meet European customers' growing demand for ammonia and to supply low-carbon ammonia to its own plants in the Netherlands.
OCI's Beaumont plant began producing ammonia using low-carbon blue hydrogen in 2021, the company said in its latest annual report. In industry parlance, “blue” refers to hydrogen produced with natural gas but whose carbon dioxide emissions are captured and sequestered, while “green” hydrogen is made with renewable electricity and water — naturally producing little to no emissions.
The company said the Beaumont ammonia project is also being designed to transition from blue to green ammonia production as sources of renewable energy come online at larger scale in the future.
"The recent passage of the IRA, which bolsters the regulatory framework and competitiveness of clean ammonia in the U.S., in addition to technological developments in carbon sequestration, is supporting ammonia as a key driver of the energy transition," said OCI Executive Chairman Nassef Sawiris. "We believe OCI, a global leader in hydrogen, will play a pioneering role in the future of this industry."
OCI is also considering adding nitrogen-based fertilizer production and a renewable fuels plant to its existing ammonia and methanol facilities in Beaumont. The firm would spend $2.8 billion on the additional fertilizer production units and $2.075 billion on the proposed lumber waste-to-fuels project, both of which would start operating in 2027.
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OCI applied for tax incentives for those proposed projects under Chapter 313 of the state tax code, which allows companies hoping to build certain projects to make agreements with the local school district to lessen their tax burdens. Beaumont Independent School District approved agreements for both projects in late August; the Texas comptroller's office later published the agreements on Sept. 22.
OCI is part-owner and operator of Natgasoline LLC in Beaumont, one of the largest methanol-manufacturing plants in the world, according to its developers.
KBR is No. 24 on the Houston Business Journal's 2022 Largest Houston-Area Public Companies List, based on its 2021 revenue of $7.34 billion.