ExxonMobil and Marubeni seal long-term ammonia offtake deal

Japanese conglomerate Marubeni Corporation has signed an agreement to purchase low-carbon ammonia from the facility being developed by U.S. energy major ExxonMobil in Baytown, Texas. Marubeni also agreed to acquire an equity stake in ExxonMobil’s low-carbon hydrogen and ammonia facility.

As disclosed on May 7, the two companies signed a long-term offtake aggrement for around 250,000 tonnes of ammonia per year from the Baytown facility, which is expected to produce low-carbon ammonia and hydrogen with approximately 98% of CO2 removed.

Maubeni intends to use the purchased ammonia to supply Kobe Power Plant, a fully owned subsidiary of Kobe Steel. By Japan’s fiscal year 2030, Kobe Power Plant aims to co-fire low-carbon ammonia with existing fuel, reducing CO2 emissions.

By establishing this supply chain, Marubeni aims to assist the decarbonization of Japan’s power sector and 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, Member of Corporate Management Committee, Supervisor of Energy & Chemicals Div. and Power & Infrastructure Services Div., Marubeni Corporation.

“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.”

Barry Engle, President of ExxonMobil Low Carbon Solutions, described the agreement as “another positive step forward” for the company’s landmark project.

“By using American-produced natural gas we can boost global energy supply, support Japan’s decarbonization goals and create jobs at home. Our strong relationship with Marubeni sets the stage for delivering low-carbon ammonia from the U.S. to Japan for years to come,” Engle stated.

Earlier this year, ExxonMobil and commodity trading and logistics company Trammo signed a heads of agreement (HoA) to advance discussions for Trammo’s long-term offtake of 300,000 to 500,000 tonnes of low-carbon ammonia per year from the Baytown facility.

With project capacity to produce up to 28.3 million cubic meters daily of low-carbon hydrogen and more nearly 1 million metric tonnes of low-carbon ammonia per year, ExxonMobil’s facility is expected to be the world’s largest of its kind upon startup, which is anticipated in 2029.

Australian company Worley will proide engineering, procurement and construction (EPC) services for the Baytown project.

In September 2024, Abu Dhabi National Oil Company (ADNOC) entered into an agreement to acquire a 35% equity stake in the facility. Reportedly, the agreement will help reduce greenhouse gas (GHG) emissions across hard-to-decarbonize sectors, including industry, energy and transportation, meet rising demand for lower-carbon fuels and accelerate a net-zero future.

Contingent on ongoing supportive government policy and necessary regulatory permits, ExxonMobil expects to reach final investment decision on this project later this year.