Woodside completes $2.3bn purchase of OCI Clean Ammonia

Global energy company Woodside has completed the acquisition of OCI Clean Ammonia and its clean ammonia project in Beaumont, Texas, for $2.3bn.

Woodside first announced its plans to acquire OCI’s ammonia assets in August in a bid to better position itself in the ammonia market and support its strategy related to the energy transition.

Read more: Woodside to acquire OCI Global’s Texas-based clean ammonia project for $2.3bn

The Beaumont project is a 1.1 million tonnes per annum clean ammonia project that will produce ammonia with less than 35% the lifecycle emissions intensity of unbated ammonia. This is achieved with carbon capture and sequestration technology.

Currently under construction, the project hopes to produce its first ammonia in 2025 and lower-carbon ammonia in 2026.

Meg O’Neill, CEO of Woodside, said the transaction will position Woodside as an early mover in the growing lower-carbon ammonia market.

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

O’Neill added, “Woodside is focused on lower-carbon ammonia and its increasingly important role in the world’s energy mix. The potential applications are in power generation, marine fuels, and as an industrial feedstock as it displaces higher-emitting fuels.”

“The transaction will generate returns exceeding our capital allocation framework targets, with phase one of the project expected to be free cash flow accretive from 2026. It also represents a material step towards delivering our Scope 3 investment and abatement targets.”

The all-cash consideration of approximately $2.35bn is inclusive of capital expenditure through completion of the first phase, with 80% paid and the remaining 20% to be paid at project completion.