TOKYO (Reuters) – Japan’s Mitsubishi Trading Co said on Friday it had reached a preliminary agreement to buy a stake in Exxon Mobil Corp’s hydrogen facility in Texas and source low-carbon ammonia from it.
As part of its decarbonization drive, Japan aims to increase the use of hydrogen and its derivative, ammonia, for co-use in power plants, and for use in the steel, automotive and other industries.
Mitsubishi said the ExxonMobil facility is expected to produce up to 1 billion cubic feet per day of hydrogen, which would remove about 98% of carbon dioxide, and more than 1 million tons of low-carbon ammonia annually.
Mitsubishi said a final decision is expected next year with the facility set to start operating in 2029, without disclosing how much stake it was willing to buy or how much ammonia it would produce.
Mitsubishi said it plans to partner with Japanese oil refiner Idemitsu Kosan to take a joint equity stake and buy ammonia, which is expected to be used in Japan for power generation, heating and other industrial activities.
Earlier this year, Idemitsu Kosan, Mitsubishi Corp. and Swiss company Proman agreed to study a fuel ammonia 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 tons of low-carbon ammonia by 2030 to industrial buyers, including in the chemical and steel sectors.
Mitsubishi, for its part, is considering converting part of its LPG plant in Namikata in western Japan into an ammonia plant and providing low-carbon ammonia for various industrial applications.
“We are excited to collaborate closely with ExxonMobil to develop low-carbon hydrogen and ammonia supply chains that will connect the United States and Japan,” Masaru Saito, CEO of Mitsubishi’s Environmental Energy Group, said in the statement.