Energy company Woodside has completed the acquisition of 100% of OCI’s 1.1 million metric tonnes clean ammonia project under construction in Beaumont, Texas, U.S.
OCI will continue to manage the construction, commissioning and startup of the facility through provisional acceptance 1 (project completion) and is targeting production of the first ammonia from 2025 and lower carbon ammonia from 2026.
According to the companies, the all-cash consideration of approximately $2,350 million is inclusive of capital expenditure through the completion of the first phase, with $1,880 million paid and the remaining $470 million to be paid at project completion.
OCI noted that this closing marks a significant milestone in its strategic value creation journey. The company stated: “The expected cumulative crystallization of approximately USD 11.6 billion gross cash proceeds from the recently announced sales of Fertiglobe, IFCO, OCI Clean Ammonia and OCI Methanol affords OCI significant flexibility to deliver on OCI’s capital allocation priorities, including deleveraging at a gross level as well as returning a meaningful quantum of capital to shareholders.”
Nassef Sawiris, Executive Chairman of OCI, commented: “ The successful closing of the Clean Ammonia transaction further reinforces OCI’s serial commitment to creating value for its shareholders and exemplifies its pioneering spirit. Looking ahead, we will continue to explore value accretive investment opportunities where we can successfully deploy our extensive knowledge, deep operational expertise, and entrepreneurial heritage.”
Meg O’Neill, Woodside’s CEO, said the transaction positions Woodside as an early mover in the growing lower carbon ammonia market, adding: “Global ammonia demand is forecast to double by 2050 with lower carbon ammonia making up nearly two-thirds of total demand. Evolving decarbonisation policies have potential to attract a premium price for lower-carbon ammonia. 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. It also represents a material step towards delivering our Scope 3 investment and abatement targets.”
To remind, Woodside entered into a binding agreement to acquire 100% of OCI Clean Ammonia Holding, which holds the Texas ammonia project, in August 2024.