TOKYO (Reuters) – Japan’s Mitsubishi trading house said on Friday it had reached a preliminary agreement to buy a stake in ExxonMobil’s (NYSE: ) hydrogen plant in Texas and buy low-carbon ammonia.
As part of its decarbonization program, 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.
The ExxonMobil facility is expected to produce up to 1 billion cubic feet per day (bcf) of hydrogen, which will remove about 98% of CO2, and more than 1 million tons of low-carbon ammonia per year, Mitsubishi said.
Mitsubishi said a final decision is expected next year, with the facility expected to come online in 2029, without disclosing the size of the stake it wants to buy or how much ammonia it will take.
Mitsubishi added that it plans to partner with Japanese oil refiner Idemitsu Kosan for the joint venture and ammonia production, which is expected to be used for power generation, process heat and other industrial activities in Japan.
Earlier this year, Idemitsu Kosan, Mitsubishi Corp and Swiss firm Proman agreed to study a fuel ammonia production project in Louisiana.
Idemitsu aims to build an ammonia import terminal using existing infrastructure at its Tokuyama plant in western Japan and supply more than 1 million tonnes of low-carbon ammonia to industrial buyers, including the chemical and steel sectors, by 2030.
Mitsubishi, for its part, is considering converting part of its liquefied petroleum gas (LPG) terminal in Namikata in western Japan into an ammonia terminal and supplying low-carbon ammonia for various industrial applications.
“We are pleased to work closely with ExxonMobil to develop low-carbon hydrogen and ammonia supply chains that will connect the US and Japan,” said Masaru Saito, chief executive of Mitsubishi’s environmental energy group.
