Woodside Energy Group has completed its acquisition of 100 percent equity interest in OCI Clean Ammonia Holding B.V., which holds its lower carbon ammonia project in Texas from OCI N.V.
The all-cash consideration of approximately $2.35 billion is inclusive of capital expenditure through completion of the first phase, with 80 percent paid and the remaining 20 percent to be paid at completion of the project, Woodside said in a news release.
The OCI Clean Ammonia project currently remains under construction in Beaumont, Texas. The project is targeting production of first ammonia in 2025 and lower carbon ammonia in 2026, Woodside said.
OCI will manage the construction of the project through provisional acceptance. It will continue to manage the construction, commissioning, and startup of the facility. The company will continue to direct the contractors until the project is fully staffed and operational, at which point it will turn it over to Woodside.
Woodside CEO Meg O’Neill said the transaction has positioned Woodside as an early mover in the growing lower carbon ammonia market.
“As a global energy provider, Woodside is focused on lower carbon ammonia and its increasingly important role in the world’s energy mix. The potential applications are in power generation, marine fuels and as an industrial feedstock, as it displaces higher-emitting fuels,” O’Neill said.
“Global ammonia demand is forecast to double by 2050 with lower carbon ammonia making up nearly two-thirds of total demand. Evolving decarbonization policies have potential to attract a premium price for lower carbon ammonia,” she continued. “The transaction will generate returns exceeding our capital allocation framework targets, with phase 1 of the Project expected to be free cash flow accretive from 2026. It also represents a material step towards delivering our Scope 3 investment and abatement targets”.
Woodside announced in August that it had entered into an agreement to acquire OCI’s Clean Ammonia Project. Following the startup of carbon capture and sequestration, the project will generate ammonia with less than 35 percent of the lifecycle emissions intensity of unabated ammonia, according to the release.
OCI Clean Ammonia is the world’s first large-scale, low-carbon intensity (CI) hydrogen-based greenfield ammonia facility, according to an earlier statement. 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 contracted with ExxonMobil for carbon dioxide (CO2) transportation and sequestration infrastructure. In its first phase, the project is expected to result in the capture and sequestration of 1.7 million metric tons per year of CO2.
OCI Clean Ammonia is anticipated to meet blue ammonia specifications “by any standard announced to date,” OCI said, adding that it is the only blue ammonia facility under construction globally, capable of producing 1.1 million metric tons per year of blue ammonia in its first phase. The necessary infrastructure and utilities are in place to double the capacity, the company added.
Source: rigzone.com