Australian energy major Woodside has announced a definitive agreement to purchase OCI Clean Ammonia from OCI Global for $2.35bn (A$3.62bn). The asset in question is a clean ammonia project currently under construction in Beaumont, Texas.

The acquisition is expected to bolster Woodside’s position in the lower-carbon ammonia market, which is seeing increased demand as the energy industry pivots towards more sustainable solutions.

Phase 1 of the project has a design capacity of 1.1 million tonnes per annum (mtpa) and aims to commence ammonia production from natural gas by 2025.

Subsequently the facility will focus on lower-carbon ammonia production, which involves natural gas combined with carbon capture and storage (CCS), targeted to start in 2026. The potential applications for lower-carbon ammonia are in power generation, marine fuels and as an industrial feedstock, as it displaces higher-emitting fuels.

Woodside CEO Meg O’Neill says global ammonia demand is forecast to double by 2050, with lower-carbon ammonia making up nearly two-thirds of total demand.

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