TOKYO, Sept 13 (Askume) – Japanese trading giant Mitsubishi (8058.T) said on Friday it will acquire Texas-based ExxonMobil.(XOM.N) has reached a preliminary agreement to buy a stake in a hydrogen facility and extract low-carbon ammonia from it.
Japan aims to increase the use of hydrogen and its derivative ammonia in co-firing power plants, the steel and automotive industries, and other industries as part of its decarbonisation drive.
ExxonMobil’s plant is expected to produce 1 billion cubic feet (bcf) of hydrogen per day, remove about 98% of carbon dioxide and produce more than 1 million tons of low-carbon ammonia per year, Mitsubishi said.
Mitsubishi said a final decision is expected next year and the plant would open in 2029. However, it did not say how many shares it wants to buy or how much ammonia it wants to raise.
Mitsubishi plans to form a joint venture with Japanese refiner Idemitsu Kosan (5019.T) and cooperate in the offtake of ammonia, which is expected to be used for power generation, process heating and other industrial activities in Japan.
Earlier this year, Idemitsu Kosan Co., Ltd., Mitsubishi Corporation and Swiss company PromanIt was agreed to study a plan to produce ammonia for fuel in Louisiana .
Idemitsu aims to use existing infrastructure at its Tokuyama plant in western Japan to build an ammonia import terminal to supply more than 1 million tonnes of low-carbon ammonia to industrial buyers including the chemical and steel industries by 2030.
In turn, MitsubishiIt is considering converting a part of its liquefied petroleum gas (LPG) terminal in the western part of Japan into an ammonia terminal and supplying low-carbon ammonia for various industrial applications.
“We are pleased to work with ExxonMobil to develop a low-carbon and ammonia supply chain that will narrow the gap between the United States and Japan,” Mitsubishi Environment & Energy Group CEO Saito Masaru said in a statement.
