OCI Progresses Iowa’s Carbon Capture & Sequestration project to abate its CO2 emissions and produce low carbon ammonia, urea and DEF in the US

• Final Investment Decision reached for first phase of IFCo’s Carbon Capture & Sequestration project to abate 450kt per annum of CO₂
• Production of low carbon ammonia, Diesel Exhaust Fluid (DEF) and other downstream urea products
• Project offers a steady, diversified income stream combining government credits and environmental attributes to generate attractive returns
• Signed long-term, binding transportation and sequestration agreements with Navigator CO₂ to transport captured CO₂ through its Heartland Greenway carbon platform
• Signed lump-sum turnkey contract with Enerflex for the provision of a modularized integrated carbon capture facility
• First phase targeted completion in Q1 2025

OCI N.V. (Euronext: OCI) today announced it has entered into long-term agreements with Navigator and Enerflex for a project to capture and sequester CO₂ produced on-site at Iowa Fertilizer Company (IFCo), a wholly-owned subsidiary of OCI N.V. The project is targeted to be complete by Q1 2025.

The first phase, abating up to 40% of IFCo’s CO₂ emissions from the ammonia production process (c.450kt CO₂ per annum from the facility’s maximum production capacity of just under 1 million metric tons per annum ammonia), is a meaningful contribution to OCI’s overall target of achieving a 20% reduction in greenhouse gas intensity by 2030 and carbon neutrality by 2050.

OCI is also currently studying a phase two for this Carbon Capture and Storage project, which would reduce post-combustion CO₂ streams up to c.700 kt per annum and could materially store all of IFCo’s emissions. OCI is evaluating various capture technologies and expects phase two to be predicated on the premium associated with the Carbon Intensity reduction in its end products as those markets develop.

Capital expenditures for OCI’s scope, inclusive of the lump-sum turnkey contract, are expected to be c.$60 million over the period 2022 – 2025, and is included in OCI’s guidance for the group’s growth capex in 2023.

Ahmed El-Hoshy, CEO of OCI N.V. commented: “This project is a good example of OCI leveraging its existing infrastructure to reduce carbon in a financially attractive way. We expect it to generate significant benefits through government tax credits, environmental attributes, and premiums for lower-carbon products, resulting in a steady diversified income stream with attractive returns well above OCI’s hurdle rate. The recently signed US Inflation Reduction Act (IRA) increased 45Q credits from $50/mt to $85/mt, enhancing the attractiveness of the project economics and allowing for our team to commence work on phase two. Iowa Fertilizer Company has been central to our US operations over the past 10 years and we look forward to continuing to invest in Iowa.”

Under the agreement, Navigator will provide CO₂ transportation and storage services on its carbon capture and storage system, the Heartland Greenway. The project is backed by BlackRock’s Global Energy & Power Infrastructure Fund III, which invests in essential, long-term infrastructure assets. Enerflex will engineer, fabricate, and install a modularized CO₂ capture solution  to capture IFCo’s CO₂.