Pembina Pipeline, Marubeni to Partner on Low-Carbon Ammonia Export Project

(P&GJ) — Pembina Pipeline Corp. has signed an agreement with Marubeni Corp. to progress an end-to-end, low-carbon ammonia supply chain from Western Canada to Japan and other Asian markets.

The project includes the joint development of a world-scale, low-carbon hydrogen and ammonia production facility to be sited on Pembina-owned lands adjacent to its Redwater Complex in the Alberta Industrial Heartland near Fort Saskatchewan, Alberta.

"This project represents a transformative opportunity that is highly aligned with Pembina's strategic priorities, including supporting global decarbonization efforts by exporting low-carbon energy derived from natural gas responsibly produced in Western Canada," Stu Taylor, Pembina's senior vice president amd corporate development officer, said.

Demand for low-carbon ammonia in Japan and other Asian markets is expected to grow substantially given its efficiency as a carrier of hydrogen and use as a low-carbon fuel source. Ammonia is one of the most widely produced synthetical chemicals in the world today and the production technology and handling are well understood and established. Alberta is the leading region in Canada for existing ammonia production and the project is another opportunity to support development of a hydrogen and low-carbon economy.

Initial feasibility studies have been completed and the facility has an anticipated design capacity of up to 185 kilotonnes per annum of low-carbon hydrogen production, which will be converted into approximately one million tonnes per year of low-carbon ammonia. The facility is contemplated to utilize innovative technology to capture a significant amount of the CO2 emissions with the potential for integrated transportation and sequestration on the proposed Alberta Carbon Grid being developed by Pembina and pipeline operator TC Energy. The low-carbon ammonia would be transported via rail to Canada's West Coast and shipped to Japan and other Asian markets.

Pembina and Marubeni will utilize their complementary strengths to develop and execute the project. Pembina brings its expertise in Western Canadian energy infrastructure development, construction and operations, rail logistics and export. Marubeni, a globally leading independent power producer and integrated trading conglomerate, will leverage its marketing and marine logistics capabilities, and is expected to contract for offtake from the facility, which will be used to supply Marubeni-owned and other Japanese utility power plants.

Under the deal, Pembina and Marubeni will focus on completing work critical to the development of the project, including preliminary Front End Engineering Design, engagement with various stakeholders, including governments in Canada and Japan, and commercial activities. The project is expected to be structured as an infrastructure-style, fee-based business with investment grade counterparties. Pre-FEED work is currently expected to be completed by early 2024.

Pembina Low Carbon Complex

The project would potentially serve as an anchor development to advance Pembina's ongoing efforts to establish a new growth platform known as the Pembina Low Carbon Complex (PLCC). With over 2,000 contiguous acres of undeveloped land located in the Alberta Industrial Heartland, Pembina's vision is to develop an industrial complex for low-carbon energy infrastructure to better enable Pembina and third parties to develop projects, while reducing costs, emissions, and risk.

The PLCC will be focused on attracting and developing investment for innovative and emerging energy transition technologies, sustainable fuels, and chemicals, specifically low-carbon hydrogen and hydrogen carriers such as ammonia and methanol. Projects within the PLCC would gain access to one or more of the following prerequisites to enable the construction and operation of large-scale clean energy projects: land, low-carbon hydrogen, clean power, natural gas and industrial gases, water, CCUS, and the construction and operation of rail assets to support product movement.

Within the PLCC, Pembina would lease land to third parties and provide infrastructure, logistics, and shared services to tenants, depending on their needs, under typical Pembina commercial models. Tenants are contemplated to capture CO2 and direct those emissions to Pembina in support of the proposed Alberta Carbon Grid. Pembina may also consider direct investments in projects.

Commercial discussions are progressing with various potential tenants and strategic partners and Pembina looks forward to providing future updates.


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