Woodside Energy to buy $2.4 billion clean ammonia project in Texas following "major" Tellurian acquisition

(Bloomberg) – Woodside Energy Group Ltd., Australia’s largest energy producer, will buy a clean ammonia project in Texas for $2.35 billion.

Woodside will buy OCI Clean Ammonia Holding BV from Dutch chemicals company OCI NV in an all-cash transaction, it said in a statement on Monday. The plant is under construction and expects to start producing from 2025, with lower-carbon ammonia output to follow a year later. 

OCI shares jumped as much as 11% at the open in Amsterdam.

The purchase is Woodside’s second major acquisition in the U.S. in less than two weeks, after it agreed to buy liquefied natural gas developer Tellurian Inc. for $900 million.

Most ammonia is currently produced using natural gas, but it can also be made using hydrogen made from green energy sources and nitrogen from the air to create a potential zero-emissions fuel for shipping and power plants.

“This transaction positions Woodside in the growing lower carbon ammonia market,” Woodside Chief Executive Officer Meg O’Neill said in the statement. “Global ammonia demand is forecast to double by 2050, with lower carbon ammonia making up nearly two-thirds of total demand.”

The project in Beaumont has a capacity of 1.1 million tons a year in the first phase, while the addition of carbon capture and storage will allow it to produce lower-emission ammonia from 2026, Woodside said. Agreements are in place for the feedstock and carbon capture capacity with Linde Plc and Exxon Mobil Corp., it said.