Spanish fertilizer producer Fertiberia has pulled out of the planned Barents Blue ammonia project in Norway it was developing with Horisont Energi, leaving Horisont seeking a new commercial partner.

Horisont continues to progress the 1 million mt/year Barents Blue plant, and is seeking new partners as part of a strategic review it announced in September, the company said in a statement Feb. 14.

"This work is ongoing and updates on new partnerships for the project will be provided to the market in due course," Horisont said.

The move comes just two years after Fertiberia joined the project, replacing previous partners Equinor and Var Energi in February 2023.

"Fertiberia has decided to withdraw from the project because, after an evaluation, the company has concluded that some of the necessary conditions for continuing our participation are not being met," a Fertiberia spokesperson told S&P Global Commodity Insights by email. "We appreciate the effort and work done so far, and this decision is based on alignment with the objectives we are currently pursuing."

Horisont co-CEO Bjorgulf Haukelidsaeter Eidesen told Commodity Insights the company would continue to progress the project, but declined to give a reason for the partnership ending.

"We will be progressing the project in parallel with finalizing the process with the new partnership," Haukelidsaeter Eidesen said by email. "The next milestone we are working towards is concept selection, being ready for front-end engineering design."

Target FID, offtake

Horisont has signed a term sheet for gas supply to the facility from the Equinor-operated Snohvit LNG facility at Melkoya, it said Feb. 11, which it will use to make hydrogen for the ammonia production process.

Horisont is targeting a final investment decision in 2026, with first production in 2029-30.

The company is negotiating term sheets for ammonia offtake agreements and CO2 storage, it said in its third-quarter results in November.

It has signed letters of intent with VNG for 100,000-300,000 mt/year and Barents Naturgass for 100,000 mt/year, it said.

CO2 storage headwinds

The company is studying options for CO2 storage from the project after Orlen Upstream pulled out from developing the Polaris license in October.

Barents Blue aims to capture and store over 99% of CO2 emissions from the production process.

The CO2 store was an integral part of the Barents Blue project, though Horisont is also assessing additional CO2 storage options as part of concept selection.

"Recent development for CO2 storages in the North Sea has provided new alternatives, and thus optionality, for the Barents Blue project that were not available when the project was launched," Horisont said at the time.

The company has also secured power supply for the first phase of the project, which requires 45 MW of power.

It has a Norwegian government grant backing of NOK482 million ($43 million) under the EU's Important Projects of Common European Interest program.

Platts, part of Commodity Insights, assessed low-carbon ammonia CFR Northwest Europe at $656/mt on Feb. 13, at a $66/mt premium to conventional ammonia.

Var, Equinor exit

Var Energi exited the Barents Blue project in 2023, concluding that it did not offer sufficient capacity for offtake from the natural gas resources it was developing in the region, including Goliat, Alke and Lupa.

Var said at the time it had investigated various alternatives for exporting gas resources in Alke and Goliat, west of Hammerfest.

It joined Equinor and Horisont in the Barents Blue collaboration in 2021, with the aim of tying in Alke and Goliat gas to Barents Blue.

Equinor Senior Advisor, Business Development Per Sandberg said in 2023 the company had "less faith in the future" of the project when it withdrew, and at the time viewed US projects backed by the Inflation Reduction Act tax credits as more appealing.

"We want to prioritize other projects" in the US, he said, adding that Equinor hardly ever pulls out of a project after just two years.