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CBAM to drive low-carbon NH3 market: Woodside Q&A

  • Spanish Market: Fertilizers, Hydrogen
  • 16/12/24

Ahead of the Argus Clean Ammonia Conference Europe in Rotterdam this month, Argus spoke to Rick Beuttel, vice president for new energy at Australia's Woodside Energy, about its recently acquired carbon capture and storage (CCS) ammonia production project in the US Gulf. Edited highlights follow.

Tell me about Woodside Energy and how you ended up buying OCI's 1.1mn t CCS ammonia project in Beaumont, Texas?

Woodside is a global energy company founded in Australia, providing reliable and affordable energy across the world. Our global portfolio includes LNG, oil and gas assets across Australia, the Gulf of Mexico, the Caribbean, Senegal, Timor-Leste and Canada. Our capital allocation framework also includes target investment criteria for new energy opportunities as we work towards creating a diversified and flexible portfolio that can respond to changes in demand and supply for our products.

With respect to the Beaumont Clean Ammonia project, our acquisition positions Woodside to be an early mover in the lower carbon ammonia industry and meet growing customer demand globally. It supports our strategy to thrive through the energy transition with a low-cost, lower carbon, profitable, resilient and diversified portfolio.

How is the Beaumont plant progressing? Is it still on track to start producing in 2025, with CCS operational from 2026?

Woodside continues to target first ammonia production from 2025 for phase 1. Lower carbon ammonia production is targeted for 2026, following commencement of CCS operations to be provided to Linde by ExxonMobil.

How is the regulatory market shaping up in Europe and what affect does this have on you as a producer?

We believe that Europe's carbon border adjustment mechanism (CBAM) is going to be the driving force that pushes consumers of ammonia or hydrogen to adopt lower carbon molecules from 2026 onwards as a way to remain compliant and reduce costs.

But Europe is not the only end market. There are tenders for lower carbon ammonia in Asia, and the OCI team and now Woodside have been active in pursuing those opportunities.

In Asia, buyers prefer long-term contracts. European opportunities follow more closely the traditional ammonia market, whether for fertilizer or as a chemical feedstock, and are shorter term contract durations. Beaumont gives us the opportunity to have a balanced portfolio, both geographically and from a contract perspective.

How achievable are premiums for low-carbon ammonia in the current market and do you expect CBAM implementation will aid this?

For Woodside, phase 1 of the project exceeds our capital allocation targets.

And we'd love a huge premium on day one. But you have to be pragmatic. While there is a great deal of climate sensitivity, people are running businesses and cost is a concern. In our view the return on investment is there and the premium will increase as the CBAM percentage increases.

You also have to consider the underlying cycle of the ammonia market, global events, Europe's position with respect to gas supply and the efficiency or competitiveness of existing ammonia assets. All of these will likely cast as long a shadow as CBAM, particularly in the early years.

The Woodside project adds 1.1mn t to the market in 2026. Do you see enough demand from new cases to consume the additional supply?

There is also another project in Texas City, which will come on line soon. Of course, these two new assets coming on stream will have an impact. But if we look at the underlying competitiveness of the Gulf Coast, with low-cost gas and these new, large scale, very efficient assets, we believe they will compete. But we are not going to be running the facility at full rates from day one and we are more looking forward to trading the lower carbon ammonia. Some of that will go to Europe and some to Asia.

Speaking of which, have you participated in either the Japanese or Korean tenders?

We are looking at all markets where there is lower carbon ammonia activity, whether that is power generation, bunkering or other markets.

Looking at power generation markets in Asia, Woodside has long-standing relationships with many of the countries from an LNG perspective. Making lower carbon ammonia from natural gas and shipping it around the world is very much analogous to shipping LNG.


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05/02/25

US DOE cancels H2 hub community meetings: Update

US DOE cancels H2 hub community meetings: Update

Updates with comment from California hydrogen hub Houston, 5 February (Argus) — The US Department of Energy (DOE) has canceled meetings between planned hydrogen hubs and the public, casting further uncertainty over how the multibillion-dollar ventures will proceed as the administration of President Donald Trump pauses clean energy initiatives. California's Alliance for Renewable Clean Hydrogen Energy Systems (Arches) has informed members of the hub's Community Benefits Workgroup that it was canceling a meeting scheduled for 13 February. "In accordance with the recent Department of Energy memo issued last week, mandating that we stop all community benefits-related work, we will be pausing our biweekly Hub-level Community Benefits calls as we work with DOE to evaluate how this guidance affects Arches' community engagement strategy moving forward," Arches said in an email seen by Argus . Arches is one of seven proposed regional hydrogen production hubs around the US that were designated by former president Joe Biden to receive billions of dollars in federal funding. A total of about $170mn was announced last year and in early January to be paid out as first tranches of government funding to the seven hubs to initiate planning and development activities. The status of those payments and future disbursements have been thrown into doubt since Trump ordered a pause on payments related to the Inflation Reduction Act, an executive decision that a judge then ordered temporarily halted . Arches continues to work during a temporary pause in community engagement meetings, Arches chief executive Angelina Galiteva said in an email to Argus . "We recognize that programmatic reviews are a standard part of administrative transitions and remain confident in the ongoing progress of Phase 1 activities," said Galiteva. Community organizers in the northeast that have protested the Mid-Atlantic Clean Hydrogen Hub (Mach2) were also notified that an upcoming webinar hosted by the DOE's Office of Clean Energy Demonstrations about Phase 1 funding awards have been canceled. "We are postponing this briefing until further notice," said an e-mail sent out to those who had registered for the 13 February briefing. By Jasmina Kelemen Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

S Korea to invest $89.5mn in net zero, energy security


05/02/25
05/02/25

S Korea to invest $89.5mn in net zero, energy security

Singapore, 5 February (Argus) — South Korea today announced plans to invest 129.3bn won ($89.5mn) this year in new research and development projects in the energy sector, to achieve carbon neutrality and ensure domestic energy security. About W78.7bn will go to 41 projects in the first round of funding this year. These projects will focus on technologies related to "carbon-free" energy such as renewable energy, nuclear power, and hydrogen, among others, South Korea's energy ministry (Motie) said on 5 February. The ministry will also invest W46.2bn to improve energy efficiency and in power systems, especially given surging power demand driven by artificial intelligence. Motie also plans to invest W56.9bn in securing technologies such as next-generation solar power, flexible operation of nuclear power plants, and large-capacity water electrolysis facilities, to "respond to the climate crisis". South Korea's science ministry in December 2024 unveiled plans to invest W2.75 trillion in technologies this year to respond to climate change, which included renewable energy technology and "carbon-free" technologies like nuclear power. It is unclear if the latest W56.9bn commitment is part of the W2.75 trillion announced last year or a separate investment. South Korea in December 2024 also announced plans to invest W450 trillion won in green finance by 2030, then acting president and prime minister Han Duck-soo said before he was impeached later that week . This made deputy prime minister and finance minister Choi Sang-mok the current acting president and acting prime minister. President Yoon Suk Yeol was impeached on 14 December and has since been arrested. If Yoon is removed or resigns, a presidential election must be held within 60 days, instead of the original election date in 2027. By Tng Yong Li Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Abu Dhabi's Adnoc rolls over sulphur price in February


04/02/25
04/02/25

Abu Dhabi's Adnoc rolls over sulphur price in February

London, 4 February (Argus) — Abu Dhabi's state-owned Adnoc set its February official sulphur selling price (OSP) for the Indian subcontinent at $174/t fob Ruwais, stable from its January OSP. Adnoc's February OSP implies a delivered price of $190-191/t cfr India, with the freight cost for a 40,000-45,000t shipment to the east coast of India last assessed at $16-17/t on 30 January. The announced OSP fob price rose by $105/t from $69/t fob Ruwais in February 2024. By Maria Mosquera Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

No Trump tariff exemption on Canadian potash: Update


03/02/25
03/02/25

No Trump tariff exemption on Canadian potash: Update

Updates with 1 month delay on tariffs. London, 3 February (Argus) — US president Donald Trump will allow a one month pause before imposing a 25pc tariff on non-energy imports — including potash — from Canada. Trump signed executive orders on 1 February that will impose the levy on all US imports from Canada, although energy imports will have a lower 10pc tariff. Plans for the tariffs were announced in November, when Trump won the US presidential election, but most market participants did not expect them to be implemented, or expected that potash could be exempt, given that the US relies heavily on Canadian product. Most sources believed that the threat of tariffs was largely a bargaining tool related to border security. US fertilizer industry association The Fertilizer Institute said last week that there was not enough certainty as to whether or not the tariffs would be implemented, but if enacted would be counter to Trump's promise during his election campaign to lower grocery prices. Following the issuing of the executive order, TFI said it is ready to collaborate with the Trump administration to spur fertilizer industry growth. The US has limited domestic MOP production and over 80pc of its potash needs are sourced from Canada, around 9mn-10mn t/yr of MOP. No other major potash import market relies so heavily on one source. The US also stopped taking MOP from Belarus in 2022 following sanctions, and the lack of Canadian MOP should only further limit supply options. What does this mean for the US potash market? The tariff will no doubt raise prices in the US. MOP prices at New Orleans (Nola) and across the Corn Belt have already edged higher in recent weeks because of concerns related to potential tariffs. Nutrien increased its post-winter fill potash offers on 28 January by $25/st to $340/st fot across US midcontinent warehouses, while river terminals rose to $335/st fob. Granular MOP fob Nola values have also risen, from $255/st at the start of the year to $265/st on 30 January, compared with $322.50/st fob in January 2024. Argus calculates that the tariff will add an average premium of around $60/t at the US-Canada border but it is uncertain how much of this cost will be passed onto the buyer, or how much will be swallowed by the producer. Regardless, the higher cost of Canadian potash will likely significantly reduce the volume purchased from Canada and push US buyers to turn to alternative suppliers, which may be cheaper. But the US will not be able to replace all of the 9mn-10mn t/yr of potash that the country needs. Prices for imported MOP may also benefit from an uptick in the price of Canadian potash, as other suppliers may raise prices to narrow the premium that Canada holds, while ensuring that they still remain competitive. For the upcoming spring application season in the US, there is likely to be limited effect as domestic supply is robust and suppliers have positioned stocks accordingly, but whether the tariff will still be in place when fall demand is anticipated is difficult to predict. How will this affect Canadian exports? If the US takes less potash from Canada, the country will have no option but to push more volume for offshore exports. Canada exports around 22mn t/yr of MOP, the bulk of which is handled by Canpotex, which markets product from Nutrien and Mosaic. Germany-based K+S also exports MOP from its Bethune mine in Saskatchewan. Canada typically exports around 11mn-12.5mn t/yr of MOP via Vancouver on the west coast, and Thunder Bay and Saint John's on the east coast. The maximum volume exported from these three ports in a year is around 14mn-15mn t. Another 3mn t can be moved via Portland in the US, which will be unaffected by the tariffs. But the Canadian rail system has reduced capacity to switch to ports and the export infrastructure will likely see bottlenecks, especially as all commodities will be affected, not just potash, which means that all products will be seeking alternative markets other than the US, and the only other option is to export. Higher pricing in the US could entice other suppliers to bring more to the US, diverting product away from key market Brazil. Potash suppliers often switch between the US and Brazil, depending on which market is paying a premium. But most imports into the US come through Nola, which is far from the main MOP consuming regions further north in the Corn Belt. It is clear that the US needs Canadian potash to meet typical US application levels, and that Canada needs the US as an outlet. There remains uncertainty over how long these tariffs will last and under what conditions they might be lifted. Although there appears to be a case for potash to receive an exemption from the executive order, nothing has been said to this effect by the Trump administration. In response to Trump's tariff executive order, the Canadian government announced its own 25pc tariff on more than $100bn of US imports. By Julia Campbell and Taylor Zavala Canada MOP exports to US ’000t Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Tariffs to raise US domestic sulphur prices


03/02/25
03/02/25

Tariffs to raise US domestic sulphur prices

London, 3 February (Argus) — US sulphur consumers face higher prices as a result of President Donald Trump imposing tariffs on commodity imports from Canada and Mexico, which — along with the prospect of counter-measures — could disrupt North American sulphur trade in multiple ways. Trump issued an executive order on 1 February to impose 25pc tariffs on imports from Canada, reduced to 10pc for energy imports, and 25pc on all Mexico-sourced commodities, with the measures to come into effect on 4 February . The tariffs on energy imports from Canada and Mexico could raise sulphur prices for US consumers in two ways — directly, by increasing the price of Canadian sulphur imported to the US, and indirectly, by increasing the price of sour crude imports for US refineries, which is likely to lead to reduced flows resulting in lower domestic sulphur production and higher prices. Canadian sulphur is imported to the US for fertilizer production and industrial use, and tariffs would lead to a rise in delivered pricing of Canadian sulphur as a raw material for US fertilizer producers, with the likely knock-on impact of higher finished fertilizer prices. The US imported 850,000t of Canadian sulphur in January-November, with the majority being molten sulphur shipped by rail to the east coast, Midwest or Rocky Mountains regions. Canadian sulphur accounted for more 93pc of US sulphur imports during this period, up from 89pc from the same period in 2023. This high level of dependency is likely to mean that importers will have to accept higher prices in the near term while searching for alternative sources. Trade flow impact For their part, Canadian sulphur suppliers have some limited flexibility to increase their solid sulphur exports through Vancouver port to markets such as China, and limit liquid sulphur rail shipments to the US if tariffs make such shipments uneconomical. But a significant switch in the near term is unrealistic. Solid sulphur exports loaded at Vancouver port rose by 245,000t in 2024, bringing overall exports up by 7pc to 3.35mn t . The top destination for Canadian prilled sulphur from Vancouver last year was China, at 1.54mn t. Exports of solid sulphur through Vancouver have risen as a result of increased remelting and prilling of blocked sulphur this year from Alberta's roughly 12mn t of sulphur blocks built over time. This is expected to accelerate in 2025 as the new prilling capacity becomes more stable following earlier technical problems. But a lack of prilling capacity, the cost of additional processing, as well as limits on rail and port warehousing and loading capacity, will cap the potential to increase solid exports in the short term. Tightening availability and increasingly challenging affordability of Canadian sulphur could in turn push large US consumer Mosaic to import more solid sulphur from the Middle East for remelting in Tampa for fertilizer production. Smaller consumers, particularly in the northeast US, would likely be faced with the tariff impact. But the US may have more of its own sulphur available if Mexico responds to the US measures with counter-tariffs that disrupt the flow of US sulphur south. The US exported 376,000t of sulphur to Mexico in the first 11 months of 2024. Sulphur produced in the Gulf coast could be shipped by rail to the regions where Canadian sulphur is typically consumed, assuming infrastructure and railcar availability. But the increased freight cost could offset any potential savings relative to the 25pc tariff. In addition to rising sulphur costs, US fertilizer producers also face increased costs for imports of Canadian ammonia. These raw material price increases would be likely to be passed on to farmers, and with Canada also a large supplier of potash to the US fertilizer market, US farmers could bear the brunt of inflation driven by tariffs. Crude spillover Tariffs on crude trade between the US, Canada and Mexico will also impact the sulphur market. Canada and Mexico both export sour crude to the US, but the tariffs are likely to result in supplies from those countries being redirected to other markets. This could tighten the supply of sour crude to US refineries, reducing domestic sulphur production and pushing up prices. Mexico's state-owned oil company Pemex has more flexibility to divert its seaborne flows on economic grounds than Canadian heavy crude producers, whose output is primarily transported by pipeline to US refiners . By Maria Mosquera and Chris Mullins US sulphur imports* Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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