Australian Energy Giant Woodside Acquires Low Carbon Ammonia Project in Texas

Australia-based global energy company Woodside Energy has announced an agreement to acquire a low carbon ammonia plant in Texas for $2.35 billion from clean fuels producer OCI Global. This strategic move is driven by the long-term growth in industrial demand for cleaner energy solutions.

Currently, the global demand for ammonia stands at around 200 million tonnes per annum (Mtpa), with approximately 80% used for fertilizer applications. Woodside anticipates that the energy transition will result in a doubling of this demand by 2050. The market for lower carbon ammonia is expected to surpass the total ammonia market today, with Europe and Asia emerging as key demand centers due to policies incentivizing the use of clean energy sources for industrial applications. These policies include carbon pricing schemes like the EU’s Emissions Trading System (ETS) and Carbon Border Adjustment Mechanism (CBAM), with similar initiatives being developed in Asia.

Woodside CEO Meg O’Neill stated, “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.”

The acquisition aligns with Woodside’s Scope 3 goals, which include investing $5 billion in new energy products and lower carbon services, and making final investment decisions (FID) on projects with a total abatement capacity of 5 Mtpa CO2-e by 2030.

The project, currently under construction, is located in Beaumont, Texas, on the U.S. Gulf Coast, and is designed to serve both domestic and international customers. The first phase will have a design capacity of 1.1 Mtpa, with ammonia production anticipated to begin in 2025. Lower carbon ammonia production, derived from natural gas paired with carbon sequestration, is targeted for 2026. Agreements are in place with Linde for nitrogen and lower carbon hydrogen feedstock, and ExxonMobil will provide carbon capture and storage (CCS) services to Linde. A second phase with an additional 1.1 Mtpa production train is targeted for FID in 2026.

According to Woodside, the project has the capacity to abate 1.6 Mtpa of CO2-e in Phase 1, increasing to 3.2 Mtpa CO2-e in Phase 2.

Under the terms of the all-cash agreement, Woodside will pay 80% of the purchase price at the closing of the transaction, with the remaining balance due at project completion. OCI will continue to manage the construction, commissioning, and startup of the facility until it is fully staffed and operational.

Ahmed El Hoshy, CEO of OCI, expressed gratitude to the OCI team for developing and building the project, stating, “We are confident that Woodside, as future owner and operator of OCI Clean Ammonia, will add significant value to this peerless collaboration. We look forward to working closely with the Woodside management team to fully complete the facility in the coming months, and to ensure continuity and successful stewardship through closing and beyond.”