• Woodside has completed takeover of a major US ammonia facility, now producing grey ammonia at scale.

• Plans for blue ammonia are delayed, highlighting weak demand and dependency on upstream hydrogen and CCS.

Woodside Energy has assumed full operational control of the Beaumont ammonia facility in Texas, marking a key milestone in its push into lower-carbon fuels — even as the transition to blue ammonia faces delays. The 1.1 million tonne-per-year plant, acquired from OCI Global for $2.35bn, is already producing conventional grey ammonia, with initial output beginning in late 2025.

The original plan was to transition the facility to blue ammonia, using hydrogen supplied by Linde plc and carbon capture infrastructure linked to ExxonMobil. But that timeline has now slipped, with Woodside confirming CCS integration is unlikely before after 2026, citing “construction issues” at a third-party feedstock supply facility. The delay underlines a key structural issue: hydrogen and carbon capture projects are often dependent on external infrastructure, creating bottlenecks outside a developer’s control.

“In the face of current market disruptions, we remain focused on safely delivering ammonia supply to our customers,” said CEO Liz Westcott. She added, “In the longer-term we retain our goal of supporting the development of a competitive lower-carbon sector.”

For now, Woodside is taking a pragmatic approach — prioritising grey ammonia sales into existing markets while waiting for low-carbon economics and infrastructure to align. The company has already secured offtake agreements at current market prices, ensuring near-term revenue even as its decarbonisation strategy slows.

The delay is not just technical — it’s also commercial. Woodside has openly acknowledged that demand for low-carbon ammonia is growing more slowly than expected, raising questions about timing large-scale investments. The company now plans to align its CCS rollout with actual market demand rather than projected growth.

The US Gulf Coast remains one of the most attractive regions for blue hydrogen and ammonia, thanks to low-cost natural gas, existing industrial infrastructure and favourable geology for carbon storage. Federal incentives — including tax credits of up to $85 per tonne of CO₂ captured — further support project economics.

But even in this favourable environment, the Beaumont project shows the limits of current deployment. Infrastructure delays, uncertain demand and complex project integration are slowing progress — even for well-funded, large-scale developments.

Source:   Fuel Cells Works