Woodside Energy is set to acquire OCI Clean Ammonia for an all-cash consideration of approximately $2,350 million.
The binding agreement also includes OCI Clean Ammonia’s lower carbon ammonia project in Beaumont, Texas, which is under construction and targets production of ammonia from 2025 and lower carbon ammonia from 2026.
Woodside Energy chief executive officer Meg O’Neill said the acquisition supports the company’s placement in the energy transition.
“This transaction positions Woodside in the growing lower carbon ammonia market,” she said.
“The potential applications for lower carbon ammonia are in power generation, marine fuels and as an industrial feedstock, as it displaces higher-emitting fuels.”
According to O’Neill, global ammonia demand is forecast to double by 2050.
“This project exceeds our capital allocation framework targets for new energy projects,” she said.
“Both phases are expected to achieve an internal rate of return above 10 per cent and payback of less than 10 years.
The acquisition will also contribute to Woodside’s Scope 3 investment and abatement targets.
Phase 1 has the capacity to abate 1.6 million tonnes per annum (Mtpa) of CO2-E and Phase 2 also has the capacity to abate 3.2Mtpa CO2-E or over 60 per cent of Woodside’s Scope 3 abatement target.
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