Woodside Energy acquires Texan lower-carbon ammonia project

5th Aug 2024 10:03

(Sharecast News) - Petroleum exploration and production company Woodside Energy said on Monday that it has acquired a lower-carbon ammonia project in Texas for an all-cash consideration of approximately $2.35bn.

Woodside will acquire 100% of the project from OCI Clean Ammonia, with first ammonia production targeted for 2025 and first lower-carbon ammonia eyed for 2026. The consideration was also said to be inclusive of capex through competion of the first phase.

The London-listed group stated the project was the world's first ammonia plant paired with auto thermal reforming with 95% CO2 capture and had the capacity to abate 3.2m tonnes of CO2 per annum at full development - over 60% of the company's Scope 3 abatement target.

Chief executive Meg O'Neill said: "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.

"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% and payback of less than ten years."

As of 1000 BST, Woodside shares were down 2.10% at 1,308.0p.

Reporting by Iain Gilbert at Sharecast.com