An ammonia plant earmarked near Karratha would be fed gas from Chevron under a 10-year deal announced today.
An ammonia plant earmarked near Karratha would be fed gas from Chevron under a 10-year deal which would guarantee 60 per cent of its initial supply requirements.
Hexagon Energy Materials’ WAH2 clean ammonia project at the Maitland strategic industrial area would receive 33 terajoules of gas per day for 10 years through the indication of supply deal announced on Monday.
The agreement includes a five-year extension and is subject to a sales agreement due ahead of a final investment decision for the plant by the end of 2025.
Hexagon plans to produce 600,000 tonnes of ammonia per year from the plant to displace coal power generation in Asia and provide an alternative to diesel fuel for shipping.
The company aims to have the plant online by 2030 and is working on securing the final 40 per cent gas supply needed to underpin the project.
Hexagon chief executive Stephen Hall said the plant’s initial focus would be to supply the Asian power generation market.
“Firing 20 per cent of 1000-megawatt power station, which is a reasonable sized power station in Japan, would take half a million tons of ammonia a year, so we can very easily fit into that market,” he said.
“When you look at the shipping, there are currently about 300 iron ore carriers that work the route from the Pilbara to Asia.
“You would only need 16 of those to use ammonia as a fuel and to bunker at the Pilbara end to need half a million tons of ammonia.
“If the shipping really takes off, as people seem to be thinking that could become a very substantial part of the market.”
Mr Hall said the project benefited from existing infrastructure, established trade routes, and industrial pressure to decarbonise from both ends of the route.
He said the Pilbara would benefit from onshoring an industry currently done elsewhere, which would bring jobs and economic benefits.
In September, Yara and Pilbara Ports completed the world’s first ship-to-ship ammonia transfer off the Dampier coast.
Fortescue has long been in the market for ammonia-powered bulk carriers and late last year revealed its dual-fueled Green Pioneer at COP28 in Dubai.
The West Australia – East Asia Iron Ore Creen Corridor Consortium in 2023 found 20 ammonia-powered ships could be traversing the Pilbara-Asia route by 2030, representing about 5 per cent of the fleet.
By 2050 that number could rise to 360 ships.
BHP, Rio Tinto, Oldendorff Carriers, and Star Bulk are members of that consortium.
Ammonia bunkering is expected to be available in Singapore by 2027, but doing so would require bulk carriers to deviate from their route.
Hexagon’s pre-feasibility study tipped a project cost of $1.6 billion and a supply cost of US$552-per-tonne, which is competitive with existing marine fuel.
Mr Hall said the company had since reduced capital expenditure by tapping Water Corporation instead of building its own desalination plant, and possibly outsourcing construction of a carbon dioxide pipeline.
At full scale, WAH2 would produce 1.2 billion tonnes of ammonia per year.
