Woodside Energy Group Ltd has announced a significant acquisition, securing 100 per cent ownership of OCI Clean Ammonia Holding B.V. and its innovative ammonia project in Beaumont, Texas.

This project marks a milestone as the world’s first ammonia plant utilising auto thermal reforming with over 95 per cent CO2 capture, positioning Woodside as an early leader in the burgeoning lower carbon ammonia market.

The acquisition, valued at approximately $2.35 billion, includes capital expenditure for the completion of the first phase of the project.

The facility is under construction and aims to produce its first ammonia by 2025, with lower-carbon ammonia production set to begin in 2026.

This aligns with Woodside‘s strategy to thrive through the energy transition, as stated by CEO Meg O’Neill.

The Beaumont project is expected to significantly contribute to Woodside’s Scope 3 emissions abatement targets.

At full development, the facility will have the capacity to abate 3.2 million tonnes per annum (Mtpa) of CO2-equivalent emissions, accounting for over 60 per cent of Woodside’s Scope 3 abatement goals.

The project is designed to be free cash flow accretive from 2026 and earnings per share accretive from 2027, exceeding the company’s capital allocation target with an internal rate of return above 10 per cent.

The global demand for ammonia is projected to double by 2050, with lower-carbon ammonia expected to constitute nearly two-thirds of this demand.

The Beaumont facility’s strategic location on the US Gulf Coast provides access to multiple feedstock sources and a deepwater port for international exports, enhancing its competitive edge.

The project also benefits from advantageous transaction terms, including property tax abatements and regulatory incentives, positioning it favourably in markets like Europe and Asia, which are incentivised to source lower carbon ammonia.

The project is designed with scalability in mind, featuring a second phase (Phase 2) that remains a pre-final investment decision (FID).

Phase 2 aims to double the production capacity by adding a second 1.1 Mtpa production train, leveraging the common infrastructure established during Phase 1.

Woodside plans to achieve FID readiness for Phase 2 by 2026, with an expected capital expenditure of $1.2 to $1.4 billion.

This acquisition underscores Woodside’s commitment to leading in the lower-carbon energy sector, capitalising on the growing demand for sustainable energy solutions while achieving substantial economic returns.