ADNOC doubles net hydrogen production through stake in ExxonMobil’s Baytown project

The ExxonMobil Baytown Blue Hydrogen complex has announced major developments in recent months, rounded off by ADNOC taking a 35% stake in the project. 

The project – if developed – would become the world's largest blue hydrogen project, producing 0.9 million tonnes per annum (Mtpa) of blue hydrogen and 1 Mtpa of blue ammonia. 

Read on for more information on this deal, or fill out the form to watch our Corporate Strategic Analysis (CSAS) and Carbon experts discuss this deal and its implications. 

ADNOC's ambitious global low-carbon hydrogen plan is right on track 

ADNOC is focused on maintaining its leading role in the energy transition as part of its sustainability strategy. The energy group aims to capture 5% of the global low-carbon hydrogen market.  
 
By signing this deal with ExxonMobil, ADNOC has made significant progress towards this goal. and will double its net hydrogen production to approximately 0.6 million tonnes per annum by 2030.  

Why is this an attractive deal for both ADNOC and ExxonMobil? 

The project presents a compelling opportunity for both parties due to several key advantages: 

• Increased confidence: Before the Air Liquide announcement, uncertainty surrounded the Baytown project as ExxonMobil executives warned that the project, could be put on hold if it did not qualify for the US$3/kgH2 tax credit provided by the 45V PTC. ADNOC’s stake has provided further certainty for the project to progress to FID. 

• Strong financial returns: Wood Mackenzie’s valuation of the blue hydrogen project in Lens Hydrogen achieves anIRR of 12.3%, with further upside potential if premium off-takers can be secured through low-carbon ammonia exports.  

• Strategic offtake agreements: As well as Air Liquide’s confirmed offtake, ExxonMobil has signed a non-binding offtake term sheet agreement with JERA for 0.5 Mtpa of low-carbon ammonia. 

• Local industry demand: The project has signed a sales and purchase agreement with SK Materials, which positions it to meet existing demand from nearby industries. The potential to meet existing demand in nearby industries, premium ammonia off-takers, and participate in upcoming Japanese and Korean low-carbon ammonia auctions is an attractive prospect. 

• Enhanced support for ExxonMobil: The project will supply ExxonMobil’s existing olefins plant in Baytown. This will allow the company to secure U$330m in CAPEX support from the US DoE.  

 Will we see another entrant join ExxonMobil's Baytown project? 

The ExxonMobil Baytown Blue Hydrogen complex may attract more participants. The Project Framework Agreement signed with JERA in March 2024 aims to investigate potential involvement in the project through offtake and ownership participation. With that said, there is potential that SK Materials could also potentially join the project. 

ADNOC's stake is expected to assist in covering the substantial capital expenditure required for the project and will further strengthen the existing relationship between the two companies. 

Explore this project using Lens – watch now  

Fill in the form above as we delve further into this recent acquisition. We share our reaction to the deal, present our current perspective on the ExxonMobil Baytown Blue Hydrogen complex using our Lens platform, and share key insights from our CSAS experts.