Japanese trading house Mitsubishi announced on Friday that it has reached a preliminary agreement to acquire a stake in and offtake low-carbon ammonia from ExxonMobil's hydrogen facility in Texas. The agreement aligns with Japan's broader decarbonisation strategy, which focuses on increasing the use of hydrogen and its derivative, ammonia, across various sectors including power generation, steel, and automotive industries.

ExxonMobil's facility is projected to produce up to 1 billion cubic feet (bcf) of hydrogen per day, with approximately 98 per cent of CO2 removed, and more than 1 million tons of low-carbon ammonia annually. The final decision on the investment is expected next year, with the facility anticipated to start up in 2029. Mitsubishi has not disclosed the size of the stake or the volume of ammonia it plans to offtake.

In addition, Mitsubishi plans to collaborate with Japanese oil refiner Idemitsu Kosan for joint equity and ammonia offtake. This ammonia is intended for use in Japan for power generation, process heating, and other industrial applications. Earlier this year, Idemitsu Kosan, Mitsubishi Corp, and Swiss firm Proman agreed to explore a fuel ammonia production project in Louisiana.

Idemitsu Kosan also aims to build an ammonia import terminal at the Tokuyama plant in western Japan, with a goal to supply over 1 million tons of low-carbon ammonia by 2030. This supply will cater to industrial buyers in sectors such as chemicals and steel.

Mitsubishi is also considering converting part of its liquefied petroleum gas (LPG) terminal in Namikata, western Japan, into an ammonia terminal to supply low-carbon ammonia for various industrial uses.

"We are excited to be closely collaborating with ExxonMobil to develop low-carbon hydrogen and ammonia supply chains that will bridge the United States and Japan," said Masaru Saito, Chief Executive of Mitsubishi's Environmental Energy Group, in a statement.

Source: Reuters