Chemical company LSB Industries (NYSE: LXU) is joining forces with Lapis Energy LP to equip LSB’s El Dorado ammonia plant with carbon capture.
The two companies will be filing for a permit applications with the U.S. Environmental Protection Agency (EPA) for the construction of a Class VI well, which is designed for the permanent storage of carbon dioxide via injection in deep rock formations.
If and when approved, Lapis is expected to begin construction of the carbon capture facility at El Dorado, which in turn, is set to become operational by 2025.
With the help of carbon capture, LSB aims to reduce the levels of its current carbon dioxide emissions by 25%, while using the over 450,000 metric tons of sequestered CO2 to produce 375,000 tons of what is known as blue or low-carbon ammonia annually.
The permanently sequestered CO2 emissions are expected to qualify for the 45Q tax credit under the Inflation Reduction Act (IRA), which at this time is $85 per tons of captured CO2, starting in 2026.
Reg Manhas, Lapis Energy’s CEO, stated that the company had conducted extensive research of the capacity to effectively and safely sequester and store away carbon dioxide at the LSB El Dorado facility.
“This project benefits from the presence of geological formations that provide high-capacity storage with excellent injection potential directly beneath the facility.
These conditions allow for a very short pipeline within LSB’s property to transport the CO2 from the ammonia plant,” Manhas said.