Jera considers joining ExxonMobil’s H2 project in US

Japan's largest power producer by capacity Jera is considering joining an ExxonMobil-led hydrogen and ammonia production project in the US, aiming to boost its ammonia import portfolio in its efforts to reduce coal use.

Jera has signed a framework agreement with ExxonMobil to jointly explore the development of blue hydrogen and its derivative of ammonia at ExxonMobil's Baytown complex east of Houston, Texas, the Japanese firm said on 25 March.

Jera will explore the possibility of importing around 500,000 t/yr of ammonia and securing a stake in the project through the deal.

ExxonMobil is developing a hydrogen production plant and a carbon capture and storage (CCS) facility at its Baytown complex, aiming to begin operations in 2028.

The plant would produce around 900,000 t/yr of hydrogen, part of which will be used to produce around 1mn t/yr of ammonia, Jera said.

Jera is separately working with Norway-based fertilizer producer Yara and US ammonia producer CF Industries to develop blue ammonia production on the US Gulf coast, targeting production of more than 1mn t/yr under each partnership. Jera has not decided yet whether it wants to invest in the upstream projects.

Jera said it can proceed with projects to invest in low-carbon ammonia production and marketing only with financial and other support from the government. The private sector cannot make upstream or downstream decisions on fuel ammonia "based on just pure business judgment," Jera chief executive Yukio Kani said at CERAWeek by S&P Global in Houston on 20 March. Beyond funding, the government will have to help set safety and other standards for the new type of fuel, Kani said.

Jera aims to import around 2mn t/yr of fuel ammonia in 2030, which is nearly 70pc of Japan's current 2030 ammonia demand target of 3mn t/yr. The company is planning to start testing the use of ammonia at its 1GW Hekinan No.4 coal-fired unit by the end of this month.

Tokyo and Washington have also geared up efforts to strengthen their ties in clean energy technology development, alongside private-sector partnerships. Japan's trade and industry ministry and the US Department of Energy held a second US-Japan clean energy and energy security initiative plenary meeting on 19 March, ahead of a US-Japan leaders' summit in April. This is aimed at accelerating cooperation in developing and deploying clean energy technology such as nuclear energy, floating offshore wind, perovskite solar cell, geothermal, hydrogen and its derivatives, including ammonia and synthetic fuels, as well as carbon management.

By Motoko Hasegawa