Exxon Mobil Corporation (XOM) is making headlines today with its latest venture into low-carbon energy production. The company has entered into a partnership with Abu Dhabi National Oil Company (ADNOC), which will acquire a 35% stake in ExxonMobil’s proposed facility in Baytown, Texas. This facility is designed to produce both low-carbon hydrogen and ammonia, playing a crucial role in the global energy transition.
The project is expected to be one of the largest of its kind in the world, producing a staggering 1 billion cubic feet of low-carbon hydrogen per day and over 1 million tons of low-carbon ammonia annually. This ambitious goal is contingent upon supportive government policies and regulatory approvals.
The strategic partnership highlights ADNOC’s commitment to expanding its portfolio of lower-carbon energy sources and aligns with ExxonMobil’s goal of reducing greenhouse gas emissions across hard-to-decarbonize sectors. The facility is projected to be operational by 2029, with the final investment decision expected in 2025.
ExxonMobil’s Chairman and CEO, Darren Woods, expressed his enthusiasm for the project, emphasizing the importance of strategic partnerships in accelerating the development of a new global energy value chain. Dr. Sultan Ahmed Al Jaber, ADNOC’s Managing Director and Group CEO, echoed this sentiment, highlighting the strategic nature of the investment for ADNOC and its commitment to international growth.
The news comes after Exxon Mobil reportedly announced plans to sell its conventional oil assets in the Permian Basin, potentially fetching a billion-dollar price tag. Investors seeking exposure to XOM can consider the Energy Select Sector SPDR Fund (XLE) and the IShares U.S. Energy ETF (IYE).
As of Wednesday’s closing bell, XOM shares were trading down 0.54% at $114.84. This partnership exemplifies ExxonMobil’s dedication to the energy transition and its ambition to become a leader in low-carbon fuel production. The facility’s potential impact on the global energy landscape and its contribution to a more sustainable future will be closely watched by industry experts and investors alike.
