Woodside buys Texan ammonia plant

Woodside has bought the company behind a world-first US ammonia project for US$2.35 billion as part of efforts to meet the energy giant’s greenhouse gas emission abatement targets.

Texas-based OCI Clean Ammonia plans to combine an ammonia plant and blue hydrogen system capable of capturing 95 per cent of carbon dioxide producing low carbon ammonia from 2026.

Phase one construction is almost complete and is expected to produce its first ammonia from natural gas next year, with extra capacity from sequestered carbon to follow soon after.

Fuel from gas handler Linde’s nitrogen and low carbon feedstock facility is expected to be fed into the plant soon after commissioning.

The plant could abate 1.6 million tonnes of carbon dioxide per year, and an expansion could double that figure which would meet 60 per cent of Woodside’s emissions abatement target.

Woodside chief executive Meg O’Neill said the purchase gave Woodside a position in the 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,” she said.

“Global ammonia demand is forecast to double by 2050, with lower carbon ammonia making up nearly two-thirds of total demand.

“This project exceeds our capital allocation framework targets for new energy projects.

“Both phases are expected to achieve an internal rate of return above 10 percent and payback of less than 10 years.”

ExxonMobil will provide carbon capture and storage services to Linde.

While initially targeting the domestic market, OCI hopes to tap into Asian and European markets once its lower carbon ammonia is being produced.

Woodside expects to make a call on investing in a plant expansion in 2026.