A second Indian consortium is proposing a $300 million ammonium nitrate complex on the Burrup Peninsula.
A second Indian consortium is proposing a $300 million ammonium nitrate complex on the Burrup Peninsula.
Deepak Fertilisers has announced it is examining the feasibility of developing an ammonium nitrate complex on the Burrup Industrial Estate, following in the footsteps of Burrup Fertilisers.
Ammonium nitrate is used in the mining industry as an explosive and the agricultural industry as a fertiliser.
Deepak chief operating officer Tapan Chatterjee said strong demand for ammonium nitrate explosives in both the global and Australian mining industry had drawn Deepak to WA.
Deepak’s pre-feasibility study should be concluded in mid November and the company is aiming for a start up date at the end of 2006.
The complex will produce 300,000 tonnes per annum of ammonium nitrate, 270,000 tonnes a year of nitric acid and 150,000 tonnes per annum of ammonia.
It also could create up to 700 construction jobs and 150 full-time jobs once operational, which would be a big coup for a State Government that has struggled to reach its own project targets for the Burrup.
The Government committed $137 million to the development of multi-user infrastructure on the Burrup in the anticipation of several large down stream gas processing projects establishing there.
However of the six projects, worth $6 billion, originally slated for the Burrup only Burrup Fertilisers, has started construction. The remainder have either been cancelled or shelved.
Dr Chatterjee said Deepak’s pre-feasibility study was tracking well, however, there were a number of issues to be weighed up on top of the study’s economic implications.
He said Deepak was also investigating an Indonesian site that had a gas supply along with cheaper labour and construction costs than the Burrup that had to be weighed against security concerns with Indonesia.
Another issue, ironically for the Burrup, is the availibility of natural gas, something Dr Chatterjee also flagged as a concern.
Sources say the North West Shelf consortium, Apache Energy and the Chevron Texaco-led Gorgon venture are maximising offshore gas sales opportunities rather than offering affordable gas to the domestic downstream industry.
It is known Burrup Fertilisers is considering investing in a second downstream processing project and a spokesperson for the company said the availability of affordable gas was an important factor.
State Development Minister Clive Brown said the Government did not interfere in gas pricing but suppliers were expected to make gas available for the downstream industry.
“Equally, we would expect a price where the market is not being gouged or unfairly treated,” Mr Brown said.
However, he said he was aware of other Indian companies looking to invest in WA and had been assured by gas suppliers that gas was available for the downstream industry.
