Enbridge Inc. says it has signed a letter of intent with Yara Clean Ammonia to jointly develop a blue ammonia production facility at the Enbridge Ingleside Energy Centre near Corpus Christi, Texas.

Blue ammonia refers to ammonia that is derived from natural gas, with the carbon dioxide generated as a byproduct of the process captured and stored. 

It is considered a more environmentally friendly way of producing ammonia, though it is different from green ammonia, which is derived from renewable energy.

Calgary-based Enbridge says the proposed facility would cost between US$2.6 billion and US$2.9 billion, and would produce between 1.2 to 1.4 million tons per year of low-carbon ammonia to meet growing global demand.

It says about 95 per cent of the carbon dioxide generated from the production process would be captured and transported to nearby permanent underground storage.

Yara, which is the world's largest ammonia distributor, is expected to contract full offtake from the facility.

This report by The Canadian Press was first published March 31, 2023.