Woodside completes acquisition of OCI Clean Ammonia project in Texas

OCI Global (OCI), a global producer and distributor of hydrogen products, on Monday (30 September) announced successful completion of the sale of 100% of its equity interests in its 1.1 million metric tonnes Clean Ammonia project under construction in Beaumont, Texas, to Woodside Energy Group Ltd.

OCI will continue to manage the construction, commissioning, and startup of the facility through provisional acceptance and is targeting production of first ammonia from 2025 and lower carbon ammonia from 2026. 

The all-cash consideration of approximately USD 2,350 million is inclusive of capital expenditure through completion of the first phase, with USD 1,880 million paid and the remaining USD 470 million to be paid at Project Completion. For more information on the transaction, reference is made to the press release published on 5 August 2024.

The Clean Ammonia closing marks a significant milestone in OCI’s strategic value creation journey. 

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, said: “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.”

In a separate statement, Woodside CEO Meg O’Neill, said: “As a global energy provider, Woodside is focused on lower carbon ammonia and its increasingly important role in the world’s energy mix. The potential applications are in power generation, marine fuels and as an industrial feedstock, as it displaces higher-emitting fuels.”

“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.”

Photo credit: OCI Global
Published: 1 October, 2024