Woodside Completes Acquisition of OCI Clean Ammonia Project in Texas

Woodside Energy Group has completed the acquisition of a 100% interest in OCI Clean Ammonia Holding BV, which holds its lower carbon ammonia project in Texas from OCI NV

The cash payment of approximately $2.35 billion includes capital expenditures through completion of the first phase, with 80 percent paid out and the remaining 20 percent paid upon completion of the project, Woodside said in a news release.

The OCI Clean Ammonia Project is currently under construction in Beaumont, Texas. The project aims to produce first ammonia in 2025 and lower carbon ammonia in 2026, Woodside said.

OCI will manage the construction of the project until preliminary acceptance. It will continue to manage the construction, commissioning and commissioning of the facility. The company will continue to manage contractors until the project is fully staffed and operational and then hand it over to Woodside.

Woodside CEO Meg O'Neill said the transaction positioned Woodside as a pioneer in the growing market for lower-carbon ammonia.

“As a global energy provider, Woodside is focused on lower carbon ammonia and its increasingly important role in the global energy mix. The potential applications are in power generation, marine fuels and as an industrial raw material as it displaces higher-emitting fuels,” said O'Neill.

“Global demand for ammonia is forecast to double by 2050, with lower-carbon ammonia accounting for nearly two-thirds of total demand. As decarbonization measures evolve, they have the potential to deliver a higher price for lower-carbon ammonia,” she continued. “The transaction will generate above-average returns.” “Our capital allocation framework objectives, with Phase 1 of the project expected to result in free cash flow growth from 2026. This also represents a significant step towards achieving our Scope 3 investment and reduction targets.”

Woodside announced in August that it had entered into an agreement to acquire the Clean Ammonia Project from OCI. Once carbon capture and sequestration is operational, the project will produce ammonia at less than 35 percent of the life cycle emissions intensity of unabated ammonia, according to the release.

According to a previous statement, OCI Clean Ammonia is the world's first large-scale, low carbon intensity (CI) hydrogen-based greenfield ammonia plant. The project is a collaboration between OCI and Linde that integrates Linde's low CI hydrogen production and carbon capture technology with OCI's ammonia production, storage and transportation infrastructure.

Linde has signed a contract with ExxonMobil for carbon dioxide (CO2) transport and sequestration infrastructure. In the first phase, the project is expected to capture and store 1.7 million tonnes of CO2 per year.

OCI Clean Ammonia is expected to meet blue ammonia specifications “according to all standards announced to date,” OCI said, adding that it is the only blue ammonia plant under construction in the world, in the first year 1, Phase 1 could produce 1 million tons of blue ammonia per year. The necessary infrastructure and utilities are in place to double capacity, the company added.

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