Fortescue delays FID for green hydrogen, ammonia project

Fortescue has pushed back its final investment decision for its proposed green hydrogen and ammonia project in Brisbane, saying it has “more work to do”.

The Andrew Forrest-led company was due to make a final investment decision on its proposed Gibson Island project by December 31, but has pushed back the deadline until February 28.

Genex Power- which has a 25-year power purchase agreement with Fortescue for the Gibson Island project- has also delayed its FID for its under-development Bulli Creek Solar project in Queensland.

Under that deal, Fortescue had secured 337.5 megawatts of solar energy from Genex's Bulli Creek project expected to generate 450MW, although the company has flagged possibly expanding the project's size. 

The power purchase deal was conditional on both parties reaching financial close by their deadlines, but both have agreed to extend the sunset dates. 

Fortescue's proposed Gibson Island project is expected to produce up to 70,000 tonnes of green hydrogen annually, to then produce up to 400,000 tonnes of green ammonia per year once operational in 2026, according to its website.

A Fortescue spokesperson assured the company intended to progress the Gibson Island project to a final investment decision. 

“We have every intention of progressing Gibson Island to a Final Investment Decision, but we have more work to do," the spokesperson said in a statement. 

“We know there’s enormous demand in the market for green hydrogen and green ammonia, and we are having positive conversations with the Australian and Queensland Governments.

“Both understand the value that can be unlocked for the country through projects like these, as part of the global green energy transition.”

Genex initially revealed the delays in an ASX statement this morning, which said it had reached an agreement with Fortescue to extend the sunset date for achieving an FID for the Gibson Island project.

The two parties have also agreed to push back the date for achieving financial close for Genex’s Bulli Creek Solar project in Queensland until 31 March 2025, after being tipped for the end of 2024.

The Bulli Creek Solar project is being developed by Genex in partnership with Electric Power Development Co.

Genex also told the market this morning that it was continuing discussions with external parties for further solar offtake which may allow the initial capacity of the project to be increased up to 775MW.

Fortescue's deal to buy 337.5MW currently underpins the minimum project size of 450MW.

The discussions are expected to conclude and the size of the project will be confirmed by mid-2024, Genex said.