Woodside acquires OCI’s CCS ammonia mega-project in Texas

$2.35 billion purchase, 1.1 million tons per year production

OCI will deliver a fully-staffed, fully-operational ammonia production facility in Beaumont, Texas to Woodside later this year. OCI will continue to manage the construction and commissioning of the Beaumont clean ammonia project: a greenfield, 1.1 million ton per year facility utilising carbon capture and sequestration to mitigate emissions from gas-based hydrogen production. A second ammonia production line of equal capacity is planned, with regulatory approval expected to be received by the end of this year.

The hydrogen production plant will be owned and operated by Linde, with hydrogen feedstock to be provided to the ammonia plant from 2026 in an “over-the-fence” approach. In 2023, Linde signed an agreement with ExxonMobil for complete offtake of carbon dioxide produced at the hydrogen plant, which will be liquified, transported and permanently sequestered. After the handover to Woodside, Linde’s facility will provide hydrogen feedstock to Beaumont once operational, and will be connected to Linde’s extensive Gulf Coast hydrogen pipeline network. Linde will also supply nitrogen (via air separation) to the Beaumont plant. The announcement indicates that “competitive terms are already locked in” for these feedstock supplies.

We are exceptionally proud to have put in motion on a global scale the first FID’d blue ammonia project, with first production expected in less than a year from now. 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. We are confident that in Woodside we have found the rightful custodian for this landmark asset and its talented employees.

Executive Chairman of OCI Nassef Sawiris in his organisation’s official press release, 5 Aug 2024

For those of you who have been following us for a while, you would have heard us talk about hydrogen and particularly ammonia as an area of interest for several years really since 2021 when we first laid out our new energy investment target. And some of the constraints that we’ve been encountering as we’ve been trying to progress that strategy is this chicken-and-egg between the capability that we have and what our customers are looking to see.

With this OCI Clean Ammonia Project in Texas, it in many ways vaults us to the front of the queue. It positions us to have an ammonia plant with significant CO₂ abatement through the CCS agreement with Linde and ExxonMobil downstream of that. It is a material step forward; it allows us to go out and talk to customers with confidence about marketing a product that we have confidence we will be able to deliver to them in 2025 unabated, and in 2026 again with CCS up and running.

Woodside CEO Meg O’Neill, quoted in her organisation’s investor announcement, 5 Aug 2024