Woodside has dropped a cool $US2.4 billion ($3.6bn) to buy a lower-carbon ammonia plant under construction in Texas as the company again looks offshore for growth options.
The project will be bought from fertiliser manufacturer OCI, Perth-based Woodside told markets late on Monday.
The Texas plant is under construction and set to pump first ammonia from 2025. OCI will manage construction work until the plant is complete.
Ammonia has been touted as a potential low emission fuel as it can be manufactured using green hydrogen.
The Texas plant will produce about 1.1 million tonnes annually of ammonia made from natural gas, with carbon sequestration to capture and store carbon emissions.
The emissions intensity will be about a third of the level of unabated ammonia.
OCI touted the plant as “the world’s first large-scale, low-carbon intensity hydrogen-based greenfield ammonia facility”.
Woodside chief executive Meg O’Neill said the acquisition would position the company in the “growing lower carbon ammonia market”.
“The potential applications for lower carbon ammonia 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 2050, with lower carbon ammonia making up nearly two-thirds of total demand.”
Ms O’Neill said stage one of the project would abate about 1.6 million tonnes annually of carbon dioxide.
There’s also a second phase costing up to $US 1.4bn on the horizon.
The deal comes just weeks after the company bought US LNG hopeful Tellurian to access the Driftwood LNG project in the country’s south.
Woodside’s planned hydrogen project in Kwinana, H2Perth, has so far struggled to find success. Construction had been touted for 2024 but those plans have been delayed.