OCI Global, a Dutch producer and distributor of hydrogen products, announced Monday that it agreed to sell all of its equity interests in its clean ammonia project under construction in Beaumont to Australia’s Woodside Energy Group Ltd. for $2.35 billion on a cash-free and debt-free basis.
The deal follows Woodside’s purchase last month of Houston-based LNG producer Tellurian Inc. for $1.2 billion.
“This transaction positions Woodside in the growing lower carbon ammonia market,” Woodside CEO Meg O’Neill said. “The potential applications for lower carbon ammonia are in power generation, marine fuels and as an industrial feedstock as it displaces higher-emitting fuels.”
OCI will continue to manage the construction, commissioning and startup of the facility and direct the contractors until the project is fully staffed and operational, at which point the company will hand it over to Woodside.
The transaction is expected to close in the second half of this year if it clears OCI shareholders. OCI’s board approved the sale and has recommended that its shareholders do so as well.
Morgan Stanley & Co. International served as financial advisor to OCI and A&O Shearman and Vinson & Elkins were OCI’s legal advisors.
The A&O Shearman team was led by corporate partner Romain Dambre with support from associates Aaron Swartzman and James Heaney.
The group also included energy, natural resources and infrastructure partner Kent Rowey and associates Nathanael Kraintz, Elizabeth Coscia and Zeina Traboulsi; compensation, employment and governance partner Brian Jebb and associates Hayde Faria and Jacquelyn Watson; environment and regulatory partner Ken Rivlin and associates Nick Ognibene and Jake Ely; and tax partner Dave Lewis and counsel John Hibbard.
Others were IP/IT partner Adam Chernichaw and associates Hannah Coleman and Will Jackson; data privacy partner Helen Christakos and associate Sonya Aggarwal; real estate partner Adam Sofen; London corporate and OCI relationship partner Andrew Schoorlemmer, partner Oliver Bacon, senior associate Tom Betts and associate Andrew Boyce; and Amsterdam corporate partner Tim Stevens and senior associates David Jacobs and Anthonie Nederlof.
The V&E team was led by partners Nettie Downs in Houston, Andrew Nealon in London and Alan Alexander in Houston with assistance from associates Jimmy Chalk, Vestita Zumot, Rammy Allouche and Connor Rabalais.
Assisting them were partner Kaam Sahely, counsel Alistair Wishart, associates John Larbalestier, Afzaal Abidi, Michelle West, Joshua Hayes, Alex Riddle, Alex Lee and trainee solicitors Ellen Swarbrick and Louis Molloy (corporate); partner Todd Way and associates Curt Wimberly and Katie Dillard (tax); and counsel Michael Malenfant and associate Ethan Borrasso (energy regulatory).
Also in the group were partner Courtney Hammond and counsel Scot Dixon (real estate); partner Becky Baker (employment/labor); partner Matt Dobbins, senior partner Eric Groten and associate Kelly Rondinelli (environmental); partner Stephanie Noble (litigation); and associate Nicole Waterstradt (benefits).
V&E said it has represented OCI Clean Ammonia since its inception, advising on all aspects of the development of the market-leading, first-mover project in the low carbon ammonia sector.
V&E worked with OCI in negotiating agreements with Tecnimont, Excel Contractors and Tarsco Construction Corp. for the engineering, procurement and construction of the ammonia facility and the ammonia storage tanks. In tandem, OCI and V&E negotiated with Linde Inc. for the supply of low carbon hydrogen and with Jefferson Energy Cos. for ammonia terminalling and loading arrangements.
Latham & Watkins said it advised Woodside on the acquisition, with a deal team led by Justin T. Stolte, Brian Hintze, and Greg Sorensen, with assistance from Alexander Ross, Melanie von Staa Toledo, Caroline Silverstein, and Jeff Romano. Advice was provided on tax matters by Jared Grimley, with Christine Mainguy; on benefits and compensation matters by Julie Crisp, with Joseph Benedetto; on real estate matters by Kim Boras; on environmental matters by Nikki Buffa and Michael Dreibelbis, with Brian McCall and John Detrich; on insurance matters by Hannah Cary, with Joy Chen; on IP matters by Kieran Dickinson; on antitrust matters by Michael Egge, Patrick English, and Francesca Pisano; on data privacy matters by Jennifer Howes, Mitch Bennett and Gaby Forte; on CFIUS matters by Ruchi Gill, with Elliot Hecht; on ABC matters by Nathan Seltzer; and on public disclosures matters by Ryan Maierson, with Kate Wang and David Lee.
OCI Clean Ammonia is being billed as the world’s first large-scale, low-carbon intensity hydrogen-based greenfield ammonia facility, which began engineering in late 2021 and construction in December 2022 and is expected to produce first ammonia in 2025.
Capturing first-to-market advantages, including superior construction terms and favorable tax incentives, OCI said the project is a unique collaboration between OCI and Linde that integrates Linde’s low carbon intensity hydrogen production and carbon capture technology with OCI’s ammonia production, storage and transportation infrastructure. In addition, Linde has contracted with ExxonMobil for the carbon dioxide 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 carbon dioxide for OCI that would otherwise have been released to the atmosphere, OCI said.
OCI Clean Ammonia is anticipated to meet blue ammonia specifications by any standard announced to date, according to OCI. 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.
The 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, OCI continued. Permitting for the second line has been submitted and is expected to be received by year-end.