The $9B Deal That Almost Didn't Happen

The clean ammonia market just got a major shake-up. Air Products and Yara International announced they're in advanced negotiations for a 25-year partnership that would transform Louisiana's Gulf Coast into a global hub for low-carbon ammonia exports. The deal positions the Louisiana Clean Energy Complex as one of the largest blue hydrogen projects ever attempted in North America.

Under the proposed agreement, Yara would purchase roughly 80% of the facility's blue hydrogen output while also acquiring the ammonia production, storage, and shipping assets. That's a commitment worth approximately $2 billion to $2.25 billion, representing about 25% of the project's total estimated cost. The remaining 20% of hydrogen production would feed into Air Products' existing 700-mile Gulf Coast pipeline network.

What Makes This Partnership Work

This isn't your typical offtake agreement. Yara isn't just buying ammonia, they're taking ownership of the downstream production assets once the plant hits agreed performance levels. Air Products retains control of the hydrogen and industrial gas operations, creating a clean split between the companies' core competencies.

The partnership brings together two industry leaders with complementary strengths. Air Products operates as the world's largest hydrogen supplier with deep expertise in industrial gases. Yara commands an unmatched global ammonia distribution network, moving over 4 million metric tonnes annually through 12 ammonia vessels and 18 import terminals worldwide.

This deal structure mirrors a growing trend in the clean energy sector. As recent analysis suggests, separating asset ownership from operational agreements could become the blueprint for financing future mega-projects.

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Project Specifications at a Glance

The facility in Darrow, Louisiana represents Air Products' largest investment in the United States. The complex will produce enough hydrogen to power approximately 3 million cars daily, according to project documentation. Carbon dioxide captured during production will be permanently stored more than one mile underground in geological formations beneath Lake Maurepas.

The Financial Picture

Federal tax incentives play a significant role in making this project viable. The 45Q tax credit provides $85 per metric tonne for CO₂ permanently stored in geological formations. With the facility targeting 5 million tonnes of annual capture, that translates to potential credits exceeding $425 million annually.

Component	Details
Yara's Equity Stake	Approximately 25% of total project cost ($2B-$2.25B)
Hydrogen Offtake Agreement	25-year term, 80% of production to Yara
45Q Tax Credit Potential	$425M+ annually at $85/tonne
Remaining Hydrogen	20% feeds Air Products' 700-mile Gulf Coast pipeline

The deal structure addresses a key challenge facing mega-projects like this: capital allocation and risk distribution. By having Yara take ownership of the ammonia side while Air Products focuses on hydrogen production, both companies stay in their lanes while sharing the financial burden.

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A Broader Clean Ammonia Strategy

The Louisiana partnership is just one piece of a larger puzzle. Air Products and Yara are also finalizing a marketing and distribution agreement for the NEOM Green Hydrogen Project in Saudi Arabia, which is now more than 90% complete. That facility is expected to begin commercial production in 2027, supplying up to 1.2 million tonnes of renewable ammonia annually.

Under the proposed arrangement, Yara would commercialize any ammonia from NEOM that Air Products doesn't sell as renewable hydrogen in Europe. This positions Yara as the global distributor for what will become the world's first large-scale renewable ammonia plant.

Why Low-Carbon Ammonia Matters

Ammonia isn't just fertilizer anymore. It's emerging as a critical player in the energy transition for several reasons:

1. Hydrogen Carrier: Ammonia can be "cracked" back into hydrogen at destination ports, making it an efficient way to transport clean energy across oceans.
2. Marine Fuel: Shipping companies are exploring ammonia as a zero-carbon alternative to bunker fuel for long-haul vessels.
3. Power Generation: Japan and other countries are investing in ammonia co-firing at coal plants to reduce emissions during the energy transition.
4. Industrial Decarbonization: Hard-to-abate sectors need clean hydrogen and ammonia as feedstocks to lower their carbon intensity.

Global ammonia demand is forecast to double by 2050, with low-carbon ammonia expected to capture nearly two-thirds of that market. The race to build production capacity is heating up, with projects advancing across Texas, the Gulf Coast, and international locations.

Louisiana's Growing Role in Clean Energy

The Louisiana Clean Energy Complex adds to a growing wave of blue ammonia investments transforming the state's industrial corridor. The Gulf Coast's unique combination of existing infrastructure, favorable geology for carbon storage, and proximity to major shipping lanes makes it an ideal location for these capital-intensive projects.

The project gained new momentum after facing a period of uncertainty earlier in 2025. Air Products had taken a $2.3 billion write-down as it exited several projects and refocused its strategy under CEO Eduardo Menezes. The Yara partnership effectively de-risks the Louisiana investment by locking in a major offtaker and sharing the capital burden.

With over 270 carbon capture projects announced across the United States representing $77.5 billion in investment, the Gulf Coast region is positioning itself as the epicenter of America's decarbonization push.

What Comes Next

Both companies are targeting a final investment decision by mid-2026, subject to air permit issuance and finalization of construction contracts. If all goes according to plan, the Louisiana Clean Energy Complex could be operational by 2030, marking a significant milestone in North America's clean hydrogen and ammonia production capacity.

The partnership model being developed here could serve as a template for future projects. By separating hydrogen production from ammonia manufacturing and distribution, developers can tap into different expertise pools and financing sources while managing risk more effectively. Other blue ammonia projects in development will be watching closely to see if this structure delivers on its promise.

For now, the announcement signals strong confidence in the future of low-carbon ammonia from two of the industry's biggest players. The combination of Air Products' hydrogen expertise and Yara's global distribution muscle could prove to be exactly what this market needs to move from pilot projects to industrial-scale reality.