Vol. 27, No.41 Week of October 09, 2022
Providing coverage of Alaska and northern Canada's oil and gas industry

AGDC to collaborate on Cook Inlet ammonia, carbon sequestration plan

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Kristen Nelson

Petroleum News

The Alaska Gasline Development Corp., Mitsubishi Corp., TOYO Engineering Corp. and Hilcorp Alaska have signed a memorandum of understanding to evaluate the commercial feasibility of using North Slope natural gas delivered to Southcentral to produce carbon-free ammonia.

The goal is to “assess the potential to produce zero-carbon ammonia in the Cook Inlet region of Southcentral Alaska,” AGDC said Oct. 4.

Carbon dioxide generated by the process would be captured and sequestered underground. AGDC said the Cook Inlet basin is believed to have “world-class carbon sequestration potential.”

“The assessment project will further define Cook Inlet’s sequestration potential and the economics for producing clean ammonia alongside LNG in Alaska,” the corporation said.


AGDC President Frank Richards discussed what AGDC has been calling hydrogen opportunities with the Alaska Senate Resources Committee in April. He said many of the same reasons that allowed creation of the modern LNG industry in Alaska more than 50 years ago would allow creation of the clean hydrogen industry in Alaska, including:

*Ability to store and sequester carbon at the project site at tidewater.

*Natural gas with low greenhouse gas from conventional gas supply.

*A short distance from Cook Inlet to expanding clean hydrogen markets in Asia.

*An existing ammonia plant which would be positioned to be the first mover in the market.

Richards said carbon dioxide, CO2, is released from natural gas when gas is burned. Natural gas is somewhat difficult to store and transport, whereas hydrogen, while it releases no CO2 when burned is very difficult to store and transport, he said.

Converting hydrogen into ammonia makes storage and transportation easier and ammonia could then be exported to Asia to meet future energy needs there.

Natural gas can be converted first into hydrogen and then into ammonia, Richards said, by adding nitrogen in a process used by the existing Nutrien ammonia plant at Nikiski.

He told the committee the ammonia plant at Nikiski is in a position to be restarted and could meet an immediate need in Asia, with the ammonia a carrier of hydrogen atoms. Asia is looking to spike coal generation with ammonia to reduce the amount of carbon coming out of stacks when it is burned.

Richards said a study done of Cook Inlet some 10 years ago found 50 gigatons of CO2 sequestration is available.

He told the committee that while hydrogen is not part of AGDC’s current plan, the corporation is working with partners on external funding for hydrogen opportunities in Alaska.

CO2 capture

Overheads prepared for AGDC’s September board meeting include information on CO2 capture and sequestration, including that the Inflation Reduction Act increased the credit for CO2 capture and sequestration to $85 per ton. The gas treatment plant on the North Slope, part of AGDC’s project to move natural gas to Cook Inlet and liquefy it for shipment abroad, is planned to capture nearly 7 million tons per year. That would generate a credit of nearly $600 million per year with the credit limited to 75 million tons or 12 years, and totaling more than $6 billion. The GTP is being promoted as the Arctic carbon capture plant, “the largest carbon capture plant in the world.”

Blue ammonia

If the CO2 produced in the conversion of natural gas into hydrogen and ammonia is captured and sequestered, the resulting “blue ammonia” is a clean fuel, AGDC said.

While both hydrogen and ammonia are clean fuels that do not emit CO2 when burned, converting hydrogen into ammonia makes storage and transportation easier.

The overheads say AGDC signed a memorandum of understanding with a consortium of Japanese and American companies, and an amendment adding additional parties to the MOU is in process.

The next steps, the board was told, will be CO2 sequestration data exchange and a consortium proposal for funding in the second quarter of 2023.


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