HOUSTON, Nov 21 (Reuters) - Exxon Mobil ( XOM ) has

paused plans to build what would be one of the world's largest

hydrogen production facilities due to weak customer demand, CEO

Darren Woods told Reuters in an interview on Friday.

The suspension of the project, which had already experienced

delays, reflects a wider slowdown in efforts by traditional oil

and gas firms to transition to cleaner energy sources as many of

the initiatives struggle to turn a profit.

U.S. President Donald Trump had also yanked funding for green

initiatives to focus on fossil fuels.

Oil major Exxon announced plans in 2022 to build the plant

at its refining and chemical complex in Baytown, Texas, with a

goal of producing 1 billion cubic feet per day of so-called blue

hydrogen, a clean fuel that produces water when burned.

Potential customers have stayed on the sidelines due to the

higher cost of using hydrogen, Woods said, adding that an

industrial slowdown and economic uncertainty in Europe have

further crimped demand.

"There's been a continued challenge to establish committed

customers who are willing to provide contracts for off-take,"

Woods said.

Hydrogen can be produced from natural gas and Exxon planned

to capture the carbon dioxide generated from the process and

store it underground. That carries a higher cost than hydrogen

produced without containing the carbon dioxide, and not enough

customers are currently willing to pay the premium, Woods said.

Exxon and its partners on the facility, including Abu Dhabi

National Oil Company, have invested about $500 million so far

into the project that is estimated to cost several billion

dollars, he said, declining to give a precise figure.

Exxon can restart the project when there is enough market

demand, Woods added, though it is unclear when that could be.

"We remain convinced that one, it will be needed, and two,

this will be an advantaged project to meet that need," Woods

said.