Woodside Energy has completed its acquisition of a low carbon ammonia project in Texas. Energy Today takes a look at the commodity and its role in the energy transition.
The energy giant now owns 100 per cent of OCI Clean Ammonia Holding, the company which holds the 1.1 million tonnes per annum ammonia asset.
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,” she said.
“Global ammonia demand is forecast to double by 2050with 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.”
Ammonia, which is made by combining hydrogen and nitrogen, is widely used as fertiliser, but has other applications in the energy industry. According to the CSIRO, Australia produces around 410,000 tonnes of hydrogen per year for the purpose of making ammonia.
As ammonia is much easier to liquify, transport, and store, than hydrogen, it makes for an ideal hydrogen carrier. In other words, hydrogen can be converted into ammonia, shipped safely and reliably, and converted back to nitrogen and hydrogen for energy purposes once it reaches its destination.
But the challenge dogging the ammonia industry is that its synthesis is energy-intensive, with production accounting for around two per cent of the world’s fossil fuel energy usage.
This is precisely the issue that OCI’s clean ammonia project aims to solve. The project looks to produce its ammonia with less than 35 per cent of the lifecycle emissions of unabated ammonia.
Woodside and OCI are targeting production of first ammonia in 2025 and lower carbon ammonia from 2026. OCI will manage the construction of the project through provisional acceptance.
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