Exxon Mobil Corp. and Marubeni Corp. on Wednesday announced a deal for the Japanese diversified company to buy about 250,000 metric tons a year of ammonia from a planned Texas project of the energy giant.
Marubeni also agreed to acquire a stake in the facility, planned to rise in Baytown city with production of up to 1 billion cubic feet a day of low-carbon hydrogen and over 1 million metric tons per annum of low-carbon ammonia, a joint statement said. ExxonMobil has been in talks with several potential Japanese customers. It expects to approve the project this year depending on the policy environment and other market conditions.
About 98 percent of CO2 emissions from the facility’s hydrogen production would be captured for permanent sequestration, according to ExxonMobil. This hydrogen would then be used to produce ammonia, which is commonly used as a fertilizer but also as a component in manufacturing plastics, explosives and chemicals, among other uses.
Marubeni will supply its offtake mainly to Kobe Power Plant of Kobe Steel Ltd. The statement did not disclose the exact duration of the “long-term” agreement.
“By Japan’s fiscal year 2030, Kobe Power Plant aims to co-fire low-carbon ammonia with existing fuel, reducing CO2 [carbon dioxide] emissions”, the statement said. “Through this supply chain, Marubeni aims to assist the decarbonization of not only Japan’s power sector but also its hard-to-abate sectors, such as the steel manufacturing industry, chemical industry, transportation industry and others”.
“Marubeni will take this first step together with ExxonMobil in the aim of establishing a global low-carbon ammonia supply chain for Japan through the supply of low-carbon ammonia to the Kobe Power Plant,” said Yoshiaki Yokota, senior managing executive officer of Marubeni.
“Additionally, we aim to collaborate beyond this supply chain and strive towards the launch of a global market for low-carbon ammonia. We hope to continue to actively cooperate with ExxonMobil, with a view of utilizing this experience and relationship we have built to strategically decarbonize our power projects in Japan and Southeast Asia in the near future”.
“By using American-produced natural gas we can boost global energy supply, support Japan’s decarbonization goals and create jobs at home”, commented Barry Engle, ExxonMobil president for low-carbon solutions.
ExxonMobil is also in talks with Japan’s JERA Co. Inc. and Mitsubishi Corp. on potential investment and purchase commitments.
Mitsubishi plans to use its supply from the project in the industrial sector in Japan, where it aims to handle about 1 million metric tons a year of low-carbon ammonia by 2030.
“Mitsubishi Corporation aims to convert part of its liquified petroleum gas terminal into an ammonia terminal for transshipment, which will then supply the low-carbon ammonia to various industrial applications, such as power, automobile and chemical, mainly in the Shikoku and Chugoku regions in Japan”, said a joint statement with ExxonMobil September 13, 2024.
Mitsubishi plans to rope in Idemitsu Kosan Co. Ltd. as an equity and offtake partner.
On March 25, 2024, JERA said it had agreed to pursue talks on potential participation and commitment to purchase around 500,000 metric tons a year from the project.
“JERA is playing an important role in the energy transition and is taking on the challenge of expanding renewable energy and developing zero-emission thermal power technologies”, it said then.
To contact the author, email jov.onsat@rigzone.com
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