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UAE’s ADNOC Group has agreed to acquire a 35 per cent equity stake in ExxonMobil Corporation’s proposed hydrogen and ammonia production project in Baytown, Texas, which is poised to become the world’s largest of its kind upon completion.
ADNOC and Exxon said in a joint statement that the production facility will have the capacity to produce up to 1 billion cubic feet daily of low-carbon hydrogen, which is virtually carbon-free and removes around 98 per cent of carbon dioxide.
The facility also aims to produce more than 1 million tons of low-carbon ammonia per year.
The final investment decision is expected in 2025, and the First production is expected in 2029, the companies said without disclosing a value for the investment.
“This strategic investment is a significant step for ADNOC as we grow our portfolio of lower-carbon energy sources and deliver on our international growth strategy,” said Dr. Sultan Ahmed Al Jaber, Minister of Industry and Advanced Technology and ADNOC’s managing director and group CEO.
ADNOC is the third major industrial partner to join Exxon’s project, which is expected to cut greenhouse gas emissions in hard-to-decarbonise sectors, including industry, energy, and transportation.
Japan’s JERA, the country’s biggest power provider, signed a non-binding agreement in March to buy half of the ammonia, and in June, Air Liquide said it could use its pipelines.
ADNOC’s US investments
Meanwhile, the investment in Exxon’s Texas hydrogen project is ADNOC’s second acquisition in the US after the energy behemoth agreed to buy a stake in NextDecade’s liquefied natural gas (LNG) export project in May.
The Abu Dhabi-based energy firm acquired an 11.7 per cent stake in NextDecade’s Rio Grande LNG export facility in Texas and entered a supply agreement, marking its first significant investment in the US.
The oil giant accelerated its decarbonisation strategy, bringing forward its net zero carbon emissions target by five years to 2045, and aims to eliminate methane emissions by 2030.
ADNOC is exploring technologies like hydrogen and carbon capture to help cut emissions even as it looks for ways to keep selling hydrocarbons to new industries.
Earlier in January, the group’s board of directors increased its budget allocation for decarbonisation projects, technologies and lower-carbon solutions to a record $23bn (Dhs84.4bn), up from $15bn.
ADNOC’s six listed portfolio companies reported a combined revenue of $24.2bn (Dhs89bn), net profit of more than Dhs16bn and earnings before interest, taxes, depreciation, and amortisation (EBITDA) of Dhs28.4bn for the first half of 2024.
