By Peter Milne
Woodside will produce ammonia from gas in Texas with just a third of the normal carbon pollution with its second massive investment in the principal US oil and gas state in two weeks.
Australia’s largest oil and gas company announced late Monday that it would purchase the under-construction OCI clean ammonia plant for $US2.35 billion ($3.7 billion).
Woodside chief executive Meg O’Neill said the market for lower carbon ammonia was growing.Credit: Trevor Collens
Woodside’s plant will buy hydrogen made from gas and nitrogen from a nearby plant run by industrial gas specialist Linde and combine the two elements to make ammonia.
Woodside chief executive Meg O’Neill said the market for lower carbon ammonia was growing.
“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.”
Sales of regular ammonia will start in 2025, and a lower-carbon product will be shipped in 2026 when ExxonMobil starts storing underground emissions from the Linde plant.
It is Woodside’s second massive investment in Texas in two weeks. In July, it paid about $US900 million ($1.4 billion) for the Driftwood LNG project, which has regulatory approvals to be far bigger than Woodside’s North West Shelf plant in WA.
Both Texan investments come after Woodside’s reorganisation, announced in June, into two more independent divisions: Australia, run from Perth, and international operations managed by its growing Houston team.
The OCI purchase was announced on the same day this masthead revealed Woodside had struck trouble with its next major project in its home state of WA.
In February, the independent Environmental Protection Authority told Woodside its preliminary view was that its $US20.5 billion Browse project was environmentally unacceptable on a number of fronts.
Woodside has moved into making low-emission blue ammonia from gas just after Andrew Forrest dramatically scaled back his ambitions to make green hydrogen and ammonia from water and renewable energy.
O’Neill said both the first stage of the OCI plant to make 1.1 million tonnes of ammonia a year and a possible doubling of expansion would earn more than a ten per cent rate of return.
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