Woodside has entered into a binding agreement to acquire 100% of OCI Clean Ammonia Holding and its lower carbon ammonia project in Beaumont, Texas for an all-cash consideration of approximately $2.4 billion (€2.1 billion). The project is under construction and targets production of first ammonia from 2025 and lower carbon ammonia from 2026. The consideration is inclusive of capital expenditure through completion of the first phase (Phase 1).
Woodside CEO Meg O’Neill says the acquisition supports Woodside’s strategy to thrive through the energy transition. ‘This transaction positions Woodside in the growing lower carbon ammonia market. The potential applications for lower carbon ammonia are in power generation, marine fuels and as an industrial feedstock, as it displaces higher-emitting fuels. Global ammonia demand is forecast to double by 2050, with lower carbon ammonia making up nearly two-thirds of total demand,’ she says.
‘This project exceeds our capital allocation framework targets for new energy projects. Both phases are expected to achieve an internal rate of return above 10 percent and payback of less than 10
years. This acquisition is a material step towards delivering our Scope 3 investment and abatement targets. Phase 1 has the capacity to abate 1.6 million tonnes per annum (Mtpa) of CO2-e and with the addition of Phase 2 the project has the capacity to abate 3.2 Mtpa CO2-e, or over 60% of our Scope 3 abatement target,’ continues O’Neill.
OCI’s Clean Ammonia project is located on the US Gulf Coast and can serve customers domestically and internationally. Phase 1 has a design capacity of 1.1 Mtpa and is under construction. First ammonia production, derived from natural gas, is targeted for 2025. Lower carbon ammonia production, derived from natural gas paired with carbon sequestration, is targeted for 2026 following commencement of CCS operations.
Agreements for the feedstock and CCS capacity are in place. The nitrogen and lower carbon hydrogen feedstock will be sourced primarily from Linde. The Linde feedstock facility is currently under construction, targeting completion in early 2026. Ahead of completion, early supply of feedstock for the project will come from multiple suppliers, including Linde, from available capacity in the Gulf Coast.
The CCS services will be provided to Linde by ExxonMobil and are expected to be available in 2026. The project will target conventional ammonia customers at start-up and will target lower carbon ammonia customers in Europe and Asia when CCS is operational. The facility is designed to accommodate a second 1.1 Mtpa production train (Phase 2). Phase 2 remains pre-final investment decision (FID). Woodside will target FID-readiness for Phase 2 in 2026 with an expected gross capital expenditure range of $1.2 – 1.4 billion.
