Woodside completes OCI Clean Ammonia acquisition

Woodside has finalised the acquisition of 100% of OCI Clean Ammonia Holding, which owns its lower carbon ammonia project in Texas, from OCI, the company announced on September 30.

This follows Woodside’s August 2024 announcement of its intention to acquire OCI’s 1.1mn tonnes/year clean ammonia project. Once carbon capture and sequestration technologies are implemented, the project will produce ammonia with less than 35% of the lifecycle emissions intensity of conventional ammonia production.

Woodside CEO Meg O’Neill stated that the acquisition positioned the company as a frontrunner in the expanding lower carbon ammonia sector. "As a global energy provider, Woodside is committed to lower carbon ammonia, recognising its growing significance in the world’s energy mix. Its potential uses span power generation, marine fuels, and as an industrial feedstock, displacing more carbon-intensive fuels," she remarked.

O’Neill noted that global demand for ammonia is projected to double by 2050, with lower carbon ammonia comprising nearly two-thirds of this future demand.

She added, "The acquisition is expected to generate returns that exceed our capital allocation framework targets, with phase one of the project forecast to be free cash flow accretive by 2026. It is also a significant step towards achieving our Scope 3 investment and emissions reduction goals."

The project, still under construction, aims to begin producing ammonia by 2025, with lower carbon ammonia production targeted for 2026. OCI will oversee the construction through to provisional acceptance. The all-cash consideration of approximately $2.35bn includes capital expenditure for the first phase, with 80% already paid and the remaining 20% due upon project completion.