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pww.comExxon Mobil Corporation Presents at Barclays 38th Annual CEO Energy-Power Conference 2024, Sep-05-2024 08:00 AM - NYSE:XOM

NYSE:XOM

Daniel L. Ammann [President of Low Carbon Solutions] 💬

** Key Points by Daniel L. Ammann**

  • Mission and Investment: ExxonMobil Low Carbon Solutions aims to accelerate the world's path to net zero through large-scale decarbonization, particularly in heavy industry, while building a new business for ExxonMobil. The company has allocated $20 billion through 2027, with half for decarbonizing internal operations and the other half for third-party decarbonization projects.

  • Return Expectations: The goal is to earn a mid-teens return on the investment, and the company feels increasingly confident about achieving strong returns as projects progress.

  • Focus Areas:

    • Carbon Capture and Storage (CCS): Initially focused on the U.S. Gulf Coast due to high CO2 emissions, attractive geologic storage, and existing CO2 pipeline infrastructure. The company has signed 4 definitive agreements for CO2 offtake, representing 5.5 million tonnes annually, with a capacity to handle over 100 million tonnes.
    • Hydrogen: The Baytown hydrogen plant in Texas is set to produce 1 billion cubic feet per day, making it the world's largest low carbon hydrogen production facility when operational in 2029. The project aims for FID in the first half of 2024, requiring supply, demand, and supportive policy (45V) to align.
    • Lithium Extraction: Appraisal drilling in Arkansas has shown promising lithium concentrations. Current efforts focus on ensuring a competitive cost position and building a strong foundation for the business.
    • Renewable Fuels: A 20,000 barrel per day renewable diesel project in Strathcona, Canada, is on track to start operations in 2025.

  • Project Progress:

    • CCS: First project expected to start in the first half of 2024, contingent on obtaining the Class VI permit.
    • Baytown Hydrogen: Partnered with Air Liquide and ADNOC, with JERA signed for offtake. The project aims to reduce emissions by over 7 million tonnes annually.
    • Lithium: Work focuses on ensuring a competitive cost position and aligning with market demand projections.

  • Future Growth:

    • Three Phases:
      • Phase 1: Building foundational projects like Gulf Coast CCS, Baytown hydrogen, and lithium extraction.
      • Phase 2: Scaling the business through market-forming policies and cost reductions.
      • Phase 3: Full transition to market forces driving the carbon abatement market, with significant cost reduction and infrastructure reuse.

  • Challenges and Confidence:

    • Projects are challenging due to the need to build new value chains and commercial constructs.

    • ExxonMobil's unique capabilities and infrastructure position it well to lead in this space.

    • The company is disciplined in ensuring projects show attractive returns and can compete within the broader portfolio.

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