Ammonia (NH3) is an essential feedstock for agricultural fertilizer. Today, approximately 88% of the ammonia produced in North America is used for fertilizer production. The global market for ammonia currently sits at nearly $100 billion, and is projected to grow to $172 billion by 2034, thanks to rapid growth in Asia and Europe and expansion to other use cases.
New production technologies and the potential for NH3 and hydrogen used as carbon-free resources are further expanding applications for ammonia. From shipping fuel to emissions-free power, this unique market presents an export opportunity for terminal operators to get on board.
Despite the opportunities, some headwinds have emerged for green ammonia projects. Under the One Big Beautiful Bill Act (OBBBA), the outlook for ammonia could potentially be impacted by the accelerated phase-out of the 45V hydrogen tax credits that were enacted under the Biden Administrations Inflation Reduction Act (IRA). The uncertainty over investment tax credits for green hydrogen processes could create a ripple effect for supply chains for ammonia projects. These headwinds could result in a retreat of capital backing for green ammonia projects, forcing international buyers to pivot to other international markets.
The story is a bit different for blue ammonia as the market has become more favorable, thanks to the 45Q tax credit for carbon capture that remains largely intact under OBBBA. The blue ammonia process that utilizes America’s abundant natural gas and ideal geology for underground sequestration, now has a solid business case. New investment led predominantly by Japanese and South Korean firms and new subsidy frameworks in international markets — including Japan's Hydrogen Society Promotion Act — are aiding large-scale U.S. blue ammonia export projects.
Meanwhile, policy-driven turbulence in the U.S. is prompting opportunities for other nations to capture share in the ammonia market as international investors re-evaluate their strategies. For example, certain Middle Eastern countries are well-positioned to capitalize on their strategic location and resource advantages to supply both Europe and Asia. Meanwhile, Canada and Australia are emerging as attractive and stable alternatives for developing the new wave of low-carbon ammonia production capacity, thanks to their own combination of financial incentives, freight advantages, and established energy relationships with Asia.
Consistent Growth
Global ammonia production has recently been affected by surges in natural gas feedstock prices and disruptions in ammonia supply shipments driven partly by geopolitical conflicts. On the other hand, demand continues to grow to support food production, along with an increasing number of applications that can use ammonia to meet decarbonization goals.
The U.S. is the third largest exporter worldwide, with more than 1 million metric tons exported in 2024 alone. This market growth presents a unique opportunity for terminal operators to explore developing ammonia export terminals. However, balancing capital investment with the logistical factors of ammonia handling will be essential for export terminal project success.
Upfront Planning Considerations
Upfront planning and decision-making are critical to terminal project development and can directly shape project efficiency while lowering risk.
At the start of a project, operators should evaluate the location of upstream assets, existing terminal facilities, pipeline location and water access. Whether planning for a new terminal or revamping an existing facility, deciding plant capacity and vessel class early will serve to guide the site selection strategy.
Export terminals also require an assessment of site topography, storm surge risks from hurricanes and flooding, levees, terminal equipment elevation requirements, and more. There are many different stakeholders interested in export terminal development. Consider the required environmental, wildlife, water, safety and security rules and permits at the project start to help guide the scope and schedule.
Design To Deliver
The operating infrastructure, energy needs and export volumes of an ammonia terminal are enormous. Refrigeration systems will commonly require tens of thousands of horsepower, with ships typically loading 40 million to 55 million tons of product at a time. Therefore, an ammonia export terminal must be engineered to precise standards in the upfront design phase to safely and cost-effectively handle this highly toxic chemical.
Using the decisions made on plant capacity and vessel types, operators and designers must then focus on essential operational requirements. These must be determined early due to the large volumes of energy, water and refrigeration that ammonia demands. In this conceptual design phase, each decision aims to strike a balance among the total installed cost of assets, operational efficiency and safety.
Water and Power
Ammonia must be transported and stored in refrigerated environments. Therefore, at the outset, the terminal design must identify the availability, location and reliability of electrical power and consider the type of cooling required for industrial refrigeration.
As part of the cooling system, operators must determine whether wet surface air coolers, cooling water condensers or air coolers will be used. Considerations include evaluating efficiency, process temperatures achieved, space for assets and energy requirements. For example, using ambient force draft air, instead of water, for cooling could require up to 20% more electrical energy for the refrigeration compression.
Ammonia export terminals demand consistent, round-the-clock electrical power. Evaluation of the site includes proximity of grid interconnections and available voltage capacity, includes determining options to tap into the grid and potential for a full loop tap for higher reliability. If the site is remote, operators must determine the energy sources available and whether on-site electrical power generation may be required. A holistic approach with the design firm and service provider is essential for an effective outcome.
Tank Storage and Tank Type
Determining whether a terminal will use tank storage or direct load will have a cascading effect on decisions, cost and efficiency. Tank storage presents a large upfront investment but can help a terminal manage inventory and cope with scheduling uncertainties. With steady ammonia supply into the tank, load swings can be better managed with smaller supply pipelines and lower refrigeration requirements.
Direct load is limited by pipeline and refrigeration capacity, which can slow loading and increase dock time. A direct-load design simplifies terminal design but requires large-diameter pipelines, and higher-horsepower refrigeration.
For projects that use tank storage, full containment tanks are preferred for ammonia storage. Although this will require a larger capital investment than for single-wall tanks, full-containment tanks take up less plot space and meet safety considerations and permitting regulations. This double-walled tank design, however, generally requires submersible loading pumps, which present certain considerations for engineering and maintenance. For example, tanks with capacities in the range of 300,000 to 900,000 barrels must be drained and inspected every five to 10 years.
Refrigeration and Compression
Because of the critical nature of refrigeration for terminals, several design decisions must be made. Open-loop refrigeration (without heat exchangers) using the ammonia as the cooling medium allows simpler design and has lower power consumption. Closed-loop refrigeration can also be used with multiple refrigerant options; the process requires more equipment than an open-loop approach but can often better handle light ends or non-condensables that end up at the terminal. An experienced design contractor can evaluate refrigeration options as well as compressor types, configuration and boil-off gas management for the optimum solution.
Safety and Site Layout
If released and concentrated into the air, ammonia is highly flammable. It is also toxic at relatively low concentrations. There is flexibility in many terminal design decisions, but the safe handling, storage and containment of ammonia must be the cornerstone upon which design decisions are made.
Safety and site layout planning can go hand-in-hand. Because of the size of assets, power requirements, and safety handling mandates of ammonia export facilities, the layout of a terminal is critical.
The relative location of equipment, tanks, docks and flare systems should be based on spacing guidelines and project-specific operability and maintenance analysis. Refrigeration terminal decisions should use consequence-based modeling for toxic releases, fire, radiation and potential blast contours.
Consider site layout options as process design and equipment decisions are made. Deciding on asset placement, electrical power, water access and dock unloading will adversely affect the efficiency of the terminal and unnecessarily drive-up cost.
Driving Good Decisions
Early decisions on process choices, equipment preferences, safety strategies and plot plan will greatly determine the project cost. Engaging with field-proven engineering resources that offer planning and design best practices and deliver credible cost estimates will help drive good decisions and, ultimately, savings. Not unlike a large tanker ship, once an ammonia terminal project gets going, any course changes are complex and expensive.
