ADNOC Acquires 35% Stake in ExxonMobil’s Low-Carbon Hydrogen Plant in Texas

168

Abu Dhabi’s state oil giant, ADNOC, has announced its acquisition of a 35% stake in a large-scale hydrogen production plant planned by ExxonMobil in Texas. The project aims to produce up to 1 billion cubic feet per day of low-carbon hydrogen, with a focus on reducing carbon emissions. In a joint statement released on Wednesday, the companies confirmed that approximately 98% of the carbon dioxide generated during production would be captured and stored. While the exact value of ADNOC’s investment was not disclosed, the project represents a major step forward in both companies’ efforts to advance cleaner energy solutions.

This hydrogen facility forms part of ExxonMobil’s broader strategy to capitalize on the growing demand for low-carbon solutions, as many companies worldwide aim to decarbonize their operations. By reducing greenhouse gas emissions, ExxonMobil sees the potential to create a profitable new business segment, serving industries that are under increasing pressure to adopt sustainable practices.

Michele Fiorentino, ADNOC’s Executive Vice President of Low Carbon Solutions and Business Development, highlighted the importance of the project in an interview with Reuters. Fiorentino explained that the hydrogen produced by the facility could serve multiple purposes. “The output will either be utilized within ExxonMobil’s refining system or sold to third-party buyers interested in blue hydrogen through the Gulf Coast pipeline network,” he said. Blue hydrogen is derived from natural gas, with the associated carbon emissions captured and stored, making it a lower-carbon option.

Additionally, Fiorentino noted that the facility could produce blue ammonia, a derivative of blue hydrogen that is in high demand globally. This ammonia could be exported to major markets such as Northeast Asia and Europe, which are two of the largest demand centers for low-carbon energy solutions. Both regions are actively seeking alternatives to traditional fossil fuels, and blue ammonia has emerged as a potential solution for reducing emissions in industries like shipping and heavy manufacturing.

The companies expect to make a final investment decision on the project by mid-2025, or in the second half of next year, depending on various factors. If the project moves forward as planned, the first production from the hydrogen plant is anticipated to begin in 2029. Full production capacity would likely be reached within 12 months, subject to market demand. Fiorentino expressed confidence in the project’s success, stating, “We are reasonably confident that the demand will be there.” He further emphasized that the scale of the project would allow it to produce hydrogen at highly competitive costs.

While details about the project’s total cost were not revealed, Fiorentino indicated that it would require an investment running into billions of dollars. The facility’s scale and scope reflect ExxonMobil and ADNOC’s commitment to developing substantial infrastructure that can help meet the world’s growing need for low-carbon energy. Depending on demand and future developments, a second production unit, or “train,” of equal size could be added at a later stage, according to Fiorentino.

This collaboration marks a significant milestone for both ADNOC and ExxonMobil in their respective efforts to transition toward cleaner energy and reduce global carbon emissions. As industries around the world continue to face increasing pressure to adopt more sustainable practices, the demand for low-carbon hydrogen and ammonia is expected to grow significantly in the coming years. This project positions both companies at the forefront of that shift, giving them a competitive edge in the rapidly evolving energy landscape.

In conclusion, the planned hydrogen plant in Texas not only showcases ExxonMobil’s efforts to diversify its business but also underscores ADNOC’s growing presence in the low-carbon energy sector. As the world transitions toward cleaner fuels, partnerships like this will be key in helping industries decarbonize and achieve global climate goals. With production expected to start by 2029, the project could play a pivotal role in meeting the rising demand for low-carbon hydrogen in both local and international markets.