Marubeni and ExxonMobil in ammonia supply/equity stake deal

Japan’s Marubeni Corporation (Marubeni) and US-based materials firm ExxonMobil Corporation have signed a long-term offtake agreement for approximately 250,000 tonnes/year of low-carbon ammonia from ExxonMobil’s facility in Baytown, Texas, which is expected to produce virtually carbon-free hydrogen with approximately 98% of CO2 removed and low-carbon ammonia.

Marubeni will supply the ammonia mainly to Kobe Power Plant, a fully owned subsidiary of Kobe Steel Ltd. Marubeni has also agreed to acquire an equity stake in ExxonMobil’s low-carbon hydrogen and ammonia facility.

ExxonMobil’s facility is expected to be the world’s largest of its kind upon startup, capable of producing up to 1 billion cu ft (bcf) daily of low-carbon hydrogen, which is virtually carbon-free, and more than 1 million tonnes/year of low-carbon ammonia. Contingent on ongoing supportive government policy and necessary regulatory permits, a final investment decision is expected in 2025.

“This is another positive step forward for our landmark project,” said Barry Engle, president of ExxonMobil Low Carbon Solutions. “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.”

“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, Member of Corporate Management Committee, Supervisor of Energy & Chemicals Div. and Power & Infrastructure Services Div., Marubeni Corporation.

By Japan’s fiscal year 2030, Kobe Power Plant aims to co-fire low-carbon ammonia with existing fuel, reducing CO2 emissions. 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.