OCI Global has reached an agreement for the sale of 100% of its equity interests in its blue ammonia project under construction in Beaumont, Texas to Woodside Energy Group Ltd for a total consideration of USD 2.35 billion on a cash-free and debt-free basis, according to a news release.
ReSource reported earlier this year that the global producer and distributor of methanol and ammonia was working with Morgan Stanley to explore a sale of its ammonia production facility in Beaumont, Texas, as well as the co-located blue ammonia project under development. The evaluation, part of a larger strategic review, also included OCI’s methanol business.
As part of the earlier strategic review announced last year, OCI in December announced the divestiture of its 50% stake in Fertiglobe to ADNOC, and the sale of its Iowa Fertilizer Company to Koch Industries, bringing in $6.2bn in total net proceeds.
Under the proposed blue ammonia transaction, Woodside will acquire 100% of the equity interests in OCI Clean Ammonia.
OCI will continue to manage the construction, commissioning and startup of the facility and will continue to direct the contractors until the project is fully staffed and operational, at which point it will handover to Woodside.
The transaction is expected to close in H2 2024, subject to satisfaction of customary closing conditions and receipt of OCI shareholder approval. OCI’s Board of Directors has approved the Transaction and has recommended that its shareholders approve the Transaction.
OCI Clean Ammonia is the world’s first large-scale, low-carbon intensity hydrogen-based greenfield ammonia facility, which began engineering in late 2021, construction in December 2022, and is expected to produce first ammonia in 2025. Offering first-mover advantages including superior construction terms and favorable tax incentives, the project is a unique collaboration between OCI and Linde that integrates Linde’s low CI hydrogen production and carbon capture technology with OCI’s ammonia production, storage and transportation infrastructure. In addition, Linde has contracted with ExxonMobil the CO2 transportation and sequestration infrastructure. The Project in its first phase will result in the capture and sequestration of 1.7 million metric tonnes per year of CO2 for OCI that would otherwise have been released to the atmosphere.
OCI Clean Ammonia is anticipated to meet blue ammonia specifications by any standard announced to date. It is the only blue ammonia facility under construction globally, capable of producing 1.1 million metric tonnes per year of blue ammonia in its first phase, with the necessary infrastructure and utilities in place to double that capacity in its existing plot plan. This design philosophy and oversized infrastructure is expected to provide significant savings on budget and timeline for the ‘plug and play’ second line over any newbuild projects of similar nature. Permitting for the second line has been submitted and is expected to be received by year-end.
A&O Shearman and Vinson & Elkins are acting as OCI’s legal advisors on the transaction.
