Two weeks after announcing a major push into the U.S. LNG business, Australian group Woodside Energy said on Monday it would acquire a clean ammonia project in Texas for $2.35 billion in cash as it seeks to grow its lower-carbon offering and cut emissions from its products.
Woodside will buy the OCI clean ammonia project in Beaumont, Texas. The project is under construction and targets the production of first ammonia from 2025 and lower carbon ammonia from 2026, the Australian energy group said in a statement on Monday.
First ammonia production, derived from natural gas, is targeted for 2025.
Lower-carbon ammonia production, derived from natural gas paired with carbon sequestration, is targeted for 2026 following the commencement of CCS operations. The supply of carbon-abated hydrogen is dependent on ExxonMobil's CCS facility becoming operational, Woodside said.
The Beaumont clean ammonia project will target conventional ammonia customers at start-up and will target lower carbon ammonia customers in Europe and Asia when CCS is operational, the company added.
The deal would give Woodside the 'early-mover' advantage in the low-carbon ammonia market, while the location on the U.S. Gulf Coast gives it access to multiple sources of feedstock and a deepwater port for international export.
The acquisition supports Woodside's strategy to thrive through the energy transition, Woodside CEO Meg O'Neill 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," O'Neill added.
The deal comes two weeks after Woodside Energy struck a deal to buy Tellurian for $1.2 billion as it seeks to turn into a "global LNG powerhouse".
The deal "adds a scalable US LNG development opportunity to our existing approximately 10 Mtpa of equity LNG in Australia," O'Neill said in July.
Tellurian has been planning to build Driftwood LNG, a production and export terminal on the Calcasieu River south of Lake Charles, Louisiana, for years. Once complete, the terminal would be capable of exporting up to 27.6 million tons of LNG annually.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More