11/01/2021 - 12:51

$2.3bn urea plant for Mid West

11/01/2021 - 12:51

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Geraldton could be home to a $2.3 billion fertiliser project proposed by Strike Energy, the latest company to pursue a chemicals development in WA.

Strike chief executive Stuart Nicholls says the project followed a year of feasibility work. Photo: Gabriel Oliveira

Geraldton could be home to a $2.3 billion fertiliser project proposed by Strike Energy, the latest company to pursue a chemicals development in WA.

The oil and gas producer told the ASX today that the plant had been through a year of feasibility work with TechnipFMC.

The Geraldton development, christened Project Haber, will produce 1.4 million tonnes of urea annually, a chemical used as a fertiliser.

Strike’s announcement means there’s around $8bn of chemicals value adding projects in the pipeline in WA.

The biggest is Perdaman Industries' $4.5 billion urea project, which selected a Clough and Saipem joint venture for an engineering, procurement and construction contract in June, with the agreement finalised in December.

Perdaman, chaired by entrepreneur Vikas Rambal, is expected to announce a final investment decision for the Burrup Peninsula development mid-year.

Coogee Chemicals has also been developing a methanol project, worth $1bn, in the Burrup.

Burrup is already home to Yara Pilbara's ammonia and technical ammonium nitrate plants.

Strike’s project will be at a 60 hectare site at Narngulu Industrial Estate, where it has secured a lease option with DevelopmentWA. 

The company will pipe gas as a feedstock from its West Erregulla development in the Perth Basin.

Over a 20 year timeframe, Haber will use about 628 petajoules of gas, while a 10 megawatt wind powered electrolyser for renewable hydrogen production is also planned.

Strike claimed urea from the project would be cheaper delivered in Australia than imported urea, and will work on offtake deals starting in the second quarter of this year.

About 1.7 million tonnes of the chemical was sourced from overseas producers for use in Australia in 2019, the company said.

Chief executive Stuart Nicholls said the development could be part of a gas-lead recovery, which had been advocated by Strike director and COVID-19 recovery commissioner Nev Power.

Strike Energy believes Australia should be adding value to its natural resources, rather than just exporting them for others to high grade and sell back to us,” Mr Nicholls said.

“The launch of Project Haber concludes more than a year of feasibility work by the company aimed at identifying the best way to monetise Strike’s world class gas resources in the Perth Basin. 

“Once in production, Project Haber can support the ongoing competitiveness of Australia’s agricultural industries by lowering one of the main cost inputs into Australian farms, all whilst employing regional West Australian’s and consuming local natural gas.

Directors’ deals

Meanwhile, Strike’s directors have lifted their holdings in the business, according to recent ASX filings.

Nev Power bought 1 million shares last week at a price of 27 cents each.

Also last week, Stephen Bizzell of Bizzell Capital Partners exercised 363,750 options at 15.5 cents each.

Those shares are trading at roughly double that level on the market today.

Former GE chief executive of Australian oil and gas Mary Hackett was granted 5 million options in December, while Strike’s chief executive Stuart Nicholls was granted 3.8 million in performance rights.

Waitsia

Also today, Clough was confirmed as engineering, procurement and construction contractor for Mitsui and Beach Energy's Waitsia project.

That field will produce 250 terajoules of gas a day, more than 20 per cent of WA domestic consumption.

Clough executive vice president Australia and Asia Pacific John Galvin said the company had experience in local project delivery.

“During the construction phase an estimated 200 jobs will be created which will bring significant economic benefits to the local region and Western Australia at large,” Mr Galvin said.

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