Woodside has completed the acquisition of 100% of OCI Clean Ammonia Holding B.V., which holds its lower carbon ammonia project in Texas (Project), from OCI N.V. (together with its affiliates, OCI).1
The completion follows Woodside's announcement on 5 August 2024 that it had entered into an agreement to acquire OCI's 1.1 Mtpa Clean Ammonia Project. Following start up of carbon capture and sequestration, the Project will generate ammonia with less than 35% the lifecycle emissions intensity of unabated ammonia.2
Woodside CEO Meg O'Neill said the transaction positioned Woodside as an early mover in the growing lower carbon ammonia market.
"As a global energy provider, 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.
"Global ammonia demand is forecast to double by 2050 with lower carbon ammonia making up nearly two-thirds of total demand. Evolving decarbonisation policies have potential to attract a premium price for lower carbon ammonia.3
"The transaction will generate returns exceeding our capital allocation framework targets, with phase 1 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."4
The Project remains under construction and is targeting production of first ammonia from 2025 and lower carbon ammonia from 2026.5 OCI will manage the construction of the Project through provisional acceptance.
The all-cash consideration of approximately $2,350 million is inclusive of capital expenditure through completion of the first phase, with 80% paid and the remaining 20% to be paid at Project completion.
| _________________________________ |
1 See disclaimer for information on "lower carbon ammonia". |
2 EU proposed standards calculation method for carbon intensity. |
3 Source: Wood Mackenzie Global Ammonia Strategic Planning Outlook 2024, published 31 May 2024. |
4 For more information on this transaction and Woodside's Scope 3 targets, please refer to the announcement titled 'Woodside to acquire OCI's Clean Ammonia Project', released 5 August 2024. |
5 Production of lower carbon ammonia is conditional on supply of carbon abated hydrogen and ExxonMobil's CCS facility becoming operational. |
| This announcement was approved and authorised for release by Woodside's Disclosure Committee. |
Definitions
Woodside uses "lower carbon" to describe the characteristic of having lower levels of associated potential greenhouse gas (GHG) emissions when compared to historical and/or current conventions or analogues, for example relating to an otherwise similar resource, process, production facility, product or service, or activity.
Forward-looking statements
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