It is no secret that Trinidad and Tobago’s petrochemical sector has been in trouble due to low international prices for ammonia, methanol and urea and the relatively high cost of natural gas in T&T, plus the continued natural gas curtailment.
Natural gas is a major feedstock in the production of those petrochemicals. Hydrogen is a critical input in ammonia production. Currently, all hydrogen utilised in ammonia production in T&T is generated solely from the steam methane reforming of natural gas.
The signing of a Memorandum of Understanding (MOU) for the potential supply of green hydrogen to the Tringen Ammonia Plant by NewGen Energy Limited (NewGen) brings some hope to a sector that has been plagued by bad news for the last six years.
A joint press release from NewGen and Tringen noted that the MOU is designed to progress a feasibility study for the use of carbon-neutral and green hydrogen in the production of ammonia from the Trinidad Nitrogen Company (Tringen) facilities. The MOU will allow for a full range of data sharing between NewGen and Tringen to facilitate the development of a robust technical and commercial case for a Carbon-Neutral & Green Hydrogen plant for Tringen’s ammonia facilities.
“Once successful the feasibility study would allow for the progression of Hydrogen Off-Take Agreement negotiations,” the release read.
In an interview with the Business Guardian Philip Julien, the managing director of NewGen said green and carbon-neutral hydrogen is a game changer because it represents an opportunity to “re-frame the game”. Specifically, upon completion, the NewGen hydrogen production facility will, in collaboration with the Tringen ammonia production plant, reduce T&T’s use of natural gas for the production of ammonia, increase the global value of its ammonia production, and importantly-reduce the carbon footprint per tonne of ammonia produced.
“One of the elegant competitive advantages that T&T has in this game change scenario, is that we are already producing and managing hydrogen at a global scale, since it is the essential intermediary step that occurs in both ammonia and methanol production from natural gas—which is essentially methane—that is the separation of the methane into its constituent elements of carbon and hydrogen via a Steam Reforming Process, Julien, who is also an engineer, explained.
He argued that the NewGen Project is proposing to generate hydrogen from a non-hydrocarbon source—via the simple process of the electrolysis of a comparable amount of water that an existing ammonia or methanol plant currently is using on the Point Lisas Estate.
This will also be done by harnessing the waste heat from the country’s simple cycle power plants to help produce the hydrogen and is expected to also improve the energy efficiency of T&T’s existing power generation sector, Julien told BG.
Julien said the MOU allows the parties to exchange information and determine the major agreements that would be needed in part to progress the sale of hydrogen by NewGen to Tringen. It also enables both NewGen and Tringen to work collaboratively and transparently with each other to address topics ranging from feedstock price to an offtake agreement, as well as the technical integration aspects that will allow the low carbon hydrogen to be incorporated into the existing Tringen facility.
Asked if green hydrogen will reduce the unit cost of ammonia at the Tringen facility and allow it to be more competitive globally, Julien could not say for sure.
He articulated: “Our work to-date on the project has indicated sufficiently favourable economics to allow us to now work with Tringen on refining the answer to that very question during our feasibility study work with them over the coming weeks. What I can also say is that a positive and likely outcome is for T&T’s “greener” ammonia to fetch a higher global commodity price than traditional ammonia, since countries —particularly in Europe—are considering a premium for ammonia that is produced with a lower carbon footprint.”
Based on the pre-feasibility study, the scale and plant footprint that NewGen currently anticipates a project cost that is in the region of around US$300 million.
Julien said increased accuracy to this figure will be developed as part of the feasibility study, as the companies work to refine the engineering designs and infrastructure needs.
New Gen is also in the process of identifying and exploring current commercially available electrolysis technologies to identify the optimum technology for its hydrogen production facility.
“It is worth noting that this is not a new technology, rather it’s an emerged technology that is beginning to be deployed on an industrial scale around the world. Each of the technology providers will have elements of their specific process that will be proprietary, but the overall intent will be the production of hydrogen using electricity,” Julien told BG.
In order to keep it green the project will be using electricity generated from the renewable energy project proposed by the consortium of BPTT, Shell and Lightsource.
Julien revealed: “Some electricity will also be produced using waste heat generated by existing electricity producers, to supply carbon-neutral electricity for the NewGen Project. The commonality that exists between both of these sources is that no additional natural gas is consumed for their electricity production; sourcing the electricity for the electrolysis process from the aforementioned green, carbon neutral sources is a bedrock of the benefit of the hydrogen to be produced by NewGen.”
He said the coordination and alignment between the respective projects and related stakeholders is important, and has been on-going during the NewGen project’s development over the past months.
“As such, we have been in regular communication with the Lighsourcebp/Shell project developers, as well as T&T’s existing Power Producers and T&TEC—through whom we will purchase this electricity. In fact, NewGen is poised to be T&TEC’s biggest private-sector industrial customer, and with zero additional carbon footprint,” Julien added.
It will also drive a healthy demand for the further development of our country’s solar power generation capability, which can also help produce additional green hydrogen, Julien argued.
According to NewGen’s Managing Director with major challenges facing the local petrochemical sector NewGen is committed to make this project a reality as soon as reasonably possible, with the support of all stakeholders.
NewGen’s intent is to expeditiously and carefully develop the project to full feasibility, and ideally thereafter work towards construction completion and plant start-up in 2023.