Tuesday, January 12, 2021
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Strike Energy plan fertiliser plant capable of supplying bulk of Australia’s urea needs

Strike Energy plan fertiliser plant capable of supplying bulk of Australia's urea needs
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Plans for a $2.3 billion fertiliser project capable of manufacturing three-quarters of Australia’s current urea demand have been unveiled.

Oil and gas junior Strike Energy said the proposal would use gas from its Perth basin project and convert it into fertiliser for the agricultural market.

If the plant goes ahead, it will be capable of producing 1.4 million tonnes of urea per year for 30 years.

Urea is used by broadacre farmers as a source of nitrogen for their growing plants.

Australian farmers consume 1.9 million tonnes per year — 1.7 million tonnes of that is imported.

“Really the project is about focusing on our broadacre farming industries, our wheat, barley, sorghum,” Strike Energy chief executive Stuart Nicholls said.

He said the market relied so heavily on imports because it was more cost-effective to do so, especially given the current rising cost of energy and the relationship between gas and the cost of fertiliser.

“The reason why someone hasn’t gone out and done this to date is the lack of access to globally competitive gas,” he said.

“As Strike is the gas resource owner at this point in time, and we believe we will have such an abundant and affordable supply of that gas, we are really the project driver here.

“We’ve completed the necessary levels of study to know that Project Haber can create fertiliser in Geraldton and ship it to any part of the major farming industry in Australia, cheaper than you can import it from countries like the US, Middle East, Russia or China.

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Strike Energy’s Stuart Nicholls says the fertiliser will be sold to distributors rather than to farmers directly.(Supplied: Strike Energy)

Throughout 2021 the company will consider its offtake partnership options and move the project into front-end engineering and final design.

Mr Nicholls said if the proposal, named Project Haber, went ahead, they could start construction at their newly leased site in the Narngulu Industrial Estate near Geraldton early next year.

“2022 is probably the window that we’re looking at taking investment and moving into construction,” he said.

“So the idea is that the gas will be sent via a raw gas pipeline up to Geraldton, which is about 100km to the north of Strike’s Perth Basin gas fields.

“That gas will be stripped of its hydrogens and ultimately converted into ammonia and then into urea.”

He said the project was likely to employ 1,000 people during construction.

“It’s about a 36-month construction process for the fertiliser plant and the associated ammonia and rail offloading equipment,” he said.

He said he was proud that the project could become the world’s first green and blue-powered urea plant, by using local wind energy, natural gas, and a 10MW hydrogen electrolyser.

A dusty landscape, showing a pipeline in the background
Perdaman Industries also has plans to develop a $4.6 billion urea plant on the Burrup Peninsula near Karratha.(ABC Pilbara: Karen Michelmore)

Latest to give downstream processing a go

While traditionally, most on-shore, traditional gas projects have exported their product raw, Strike’s company policy was to lead towards downstream processing.

Mr Nicholls said with federal and state impetus to keep local manufacturing going in Australia, the opportunity was now ripe for the project.

Strike’s project is the latest to propose downstream processing of fertiliser locally.

Last year Perdaman Industries announced it was looking to set up an ammonium nitrate plant near Narrabri in north-west New South Wales, using gas from local producer Santos.

The same company has also proposed a $4.6 billion urea manufacturing plant in Western Australia’s Pilbara region.

That project will use gas supplied by Woodside’s Scarborough project and is expected to produce 2 million tonnes of urea per year, with about $600 million exported each year mainly to South-East Asia.



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