ExxonMobil, Marubeni sign offtake agreement for low-carbon ammonia

ExxonMobil and Japan’s Marubeni have signed a long-term offtake agreement for the supply of roughly 250,000 tonnes per year (tpy) of low-carbon ammonia.

The ammonia will be sourced from ExxonMobil’s facility in Baytown, Texas, which is expected to produce hydrogen with around 98% of carbon dioxide (CO2) removed and low-carbon ammonia. Marubeni will supply the ammonia mainly to Kobe Power Plant, a fully owned subsidiary of Kobe Steel, according to the announcement. The companies added that Marubeni had also agreed to acquire an equity stake in ExxonMobil’s low-carbon hydrogen and ammonia facility.

This comes as Kobe Power Plant is aiming to begin co-firing low-carbon ammonia with existing fuel by Japan’s 2030 fiscal year.

The Baytown facility is expected to be the largest of its kind globally when it starts up, with the capacity to produce up to 1bn cubic feet (28.3mn cubic metres) per day of hydrogen and more than 1mn tpy of ammonia. The companies noted that a final investment decision (FID) on the facility was expected in 2025, though this was contingent on “ongoing supportive government policy”, as well as necessary regulatory permits.

“This is another positive step forward for our landmark project,” stated ExxonMobil Low Carbon Solutions’ president, Barry Engle. “By using American-produced natural gas we can boost global energy supply, support Japan’s decarbonisation goals and create jobs at home. Our strong relationship with Marubeni sets the stage for delivering low-carbon ammonia from the US to Japan for years to come,” he said.

Marubeni’s senior managing executive officer, Yoshiaki Yokota, added that his company would take this first step together with ExxonMobil with the aim of establishing a global low-carbon ammonia supply chain for Japan.

“Additionally, we aim to collaborate beyond this supply chain and strive towards the launch of a global market for low-carbon ammonia,” he added. “We hope to continue to actively co-operate with ExxonMobil, with a view of utilising this experience and relationship we have built to strategically decarbonise our power projects in Japan and Southeast Asia in the near future.”