Woodside to Buy Ammonia Plant From OCI Global for $2.35 Billion

By David Winning

SYDNEY--Woodside Energy has agreed to an around $2.35 billion deal to buy an ammonia plant under construction in Texas, seeking greener assets to balance a portfolio that generates most of its profits from oil and natural gas production.

Woodside Chief Executive Meg O'Neill said the acquisition of the ammonia project in Beaumont, Texas, from OCI Global would support its strategy of thriving through the energy transition.

Construction of the Texas project began in late 2022 with first production of ammonia expected in 2025. The first phase of the plant aims to produce 1.1 million metric tons of ammonia each year.

For Woodside, a key attraction is agreements with industrial-gases group Linde and U.S. oil major Exxon Mobil that will allow the company to mitigate its Scope 3 emissions.

The Texas plant will incorporate Linde's low-carbon intensity hydrogen production and carbon capture technology. Also, Linde has contracts with Exxon to take and store carbon dioxide produced at the facility. Woodside said these agreements will enable output of so-called lower carbon ammonia from 2026.

"The potential applications for lower carbon ammonia 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 comprising nearly two-thirds of total consumption, she said.

Woodside said it aims to be in a position to make a final investment decision on the project's second phase, which would double production, in 2026. It estimates gross capital expenditure for that expansion at between $1.2 billion and $1.4 billion.

Write to David Winning at david.winning@wsj.com

(END) Dow Jones Newswires

August 05, 2024 03:18 ET (07:18 GMT)

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