Clean ammonia project changing owners

OCI Global, a producer and distributor of hydrogen products, is selling its clean ammonia project under construction in Beaumont, Texas to Woodside Energy Group for US$2.35 billion.

Woodside will acquire 100% of the equity interests in OCI Clean Ammonia while OCI will continue to manage the construction, commissioning and startup of the facility and will continue to direct the contractors until the project is fully staffed and operational, at which point it will handover to Woodside.

The deal is expected to close in H2 2024, subject to satisfaction of customary closing conditions and receipt of OCI shareholder approval.

OCI Clean Ammonia is the world’s first large-scale, low-carbon intensity hydrogen-based greenfield ammonia facility, which began engineering in late 2021, construction in December 2022, and is expected to produce first ammonia in 2025. The project is a unique collaboration between OCI and Linde that integrates Linde’s low carbon intensity hydrogen production and carbon capture technology with OCI’s ammonia production, storage and transportation infrastructure.

In addition, Linde has contracted with ExxonMobil the CO2 transportation and sequestration infrastructure. The project in its first phase will result in the capture and sequestration of 1.7 million metric tonnes per year of CO2 for OCI that would otherwise have been released to the atmosphere.

“This is a mature project with expansion potential,” said Meg O’Neill, CEO and managing director of Woodside. “The project is already well advanced with construction 70% complete. Ammonia production from Phase 1 is targeted for 2025 with the addition of carbon sequestration targeted from 2026 to enable the production of lower carbon ammonia. This acquisition reflects our disciplined approach to investment, whether in new energy or traditional oil and gas…This investment marks a material step forward in delivering our Scope 3 targets, which are twofold. First, we have set an investment target, to invest US$5 billion in new energy products and lower carbon services by 2030. Secondly, we have a complementary abatement target, to take final investment decisions on new energy products and lower carbon services by 2030 with total abatement capacity of 5 million tonnes per annum of CO2 equivalent.”

OCI Clean Ammonia is anticipated to meet blue ammonia specifications by any standard announced to date. It is the only blue ammonia facility under construction globally, capable of producing 1.1 million metric tonnes per year of blue ammonia in its first phase, with the necessary infrastructure and utilities in place to double that capacity in its existing plot plan. This design philosophy and oversized infrastructure is expected to provide significant savings on budget and timeline for the ‘plug and play’ second line over any newbuild projects of similar nature. Permitting for the second line has been submitted and is expected to be received by year-end.

“This pioneering investment will contribute to the global availability of low-carbon intensity ammonia, with significant potential to reduce carbon emissions in hard-to- abate sectors, including existing markets in fertilizer and industrial sectors, as well as in new applications in power and shipping,” said Nassef Sawiris, Executive Chairman of OCI. “We are confident that in Woodside we have found the rightful custodian for this landmark asset and its talented employees. Under Woodside’s leadership, OCI Clean Ammonia will play a vital role in the global energy transition, delivering new energy products and lower carbon services to reduce Woodside’s customers’ emissions globally.”