Woodside Energy Fully Acquires OCI Clean Ammonia
The completion follows Woodside’s agreement to acquire OCI Clean Ammonia’s 1.1 MTPA Clean Ammonia Project, which is currently under construction with production planned for 2025.
Woodside Energy completed the 100% acquisition of OCI Clean Ammonia Holding B.V., which operates its lower carbon ammonia project in Texas. The completed acquisition follows Woodside’s announcement in August 2024—it entered an agreement to acquire OCI’s 1.1 MTPA Clean Ammonia Project.
“As a global energy provider, Woodside is focused on lower carbon ammonia and its increasingly important role in the world’s energy mix,” said Meg O’Neill, CEO of Woodside Energy. “The potential applications are in power generation, marine fuels, and as an industrial feedstock, as it displaces higher-emitting fuels. Global ammonia demand is forecast to double by 2050 with lower carbon ammonia making up nearly two-thirds of total demand. Evolving decarbonization policies have potential to attract a premium price for lower carbon ammonia.”
The project is under construction and targets first ammonia production in 2025, with low-carbon ammonia slated for 2026. OCI will manage project construction through provisional acceptance. Following carbon capture and sequestration, the project will generate ammonia with less than 35% of the lifecycle emissions intensity of unabated ammonia. Woodside paid an all-cash consideration of approximately $2.35 billion through completion of Phase 1, with 80% paid and the remaining 20% to be paid at project completion.
Groundbreaking at OCI's Clean Ammonia Project; Image Credits: OCI Global
“The transaction will generate returns exceeding our capital allocation framework targets, with phase 1 of the Project expected to be free cash flow accretive from 2026,” said O’Neill. “It also represents a material step towards delivering our Scope 3 investment and abatement targets.”
Woodside Energy News
In July 2024, Woodside Energy signed a definitive agreement to purchase Tellurian’s issued and outstanding common stock, including the company’s Driftwood LNG development opportunity on the U.S. Gulf Coast. The transaction will be an all-cash payment of approximately $900 million, with an implied enterprise value of about $1.2 million.
Driftwood LNG is a fully permitted, pre-final investment decision (FID) development opportunity in Louisiana—the plan includes five LNG trains through four phases, with a total permitted capacity of 27.6 MTPA. Foundation development contains two phases: Phase 1 (11 MTPA) and Phase 2 (5.5 MTPA). Phase 1 FID-readiness is targeted for Q1 2025. For Phase 1 and 2, Woodside expects development costs of approximately $900-$960 per ton.
In March, Woodside Energy announced the sale of a 10% non-operating participating interest in the Scarborough Joint Venture—a natural gas field development project—to LNG Japan. It previously established a strategic partnership with LNG Japan on Aug. 8, 2023, that granted LNG Japan equity in the Scarborough Joint Venture, potential LNG offtake from the site, and collaboration on new energy opportunities. Woodside received US$910 million for LNG Japan’s equity in the project, which covered the purchase price, reimbursed expenditure, and escalation.
Woodside will remain the sole operator of the Scarborough Joint Venture with a 90% majority interest in the project. After the most recent sale, Woodside’s share of proven undeveloped reserves in the Scarborough field will be reduced to 1,158.3 million barrels of oil equivalent (MMboe), while proven plus probable undeveloped reserves decrease to 1,809.7 MMboe. Woodside’s best estimate contingent resources fall to 20.2 MMboe.
