Fortescue delays green hydrogen project FID again

UPDATED 6AM AWST: Fortescue has again pushed out the deadline for making a final investment call on its stalled green hydrogen and ammonia project in Brisbane.

It comes after the clock struck midnight on Fortescue's final investment decision deadline of February 28 for its Gibson Island project, after Fortescue pushed out the previous deadline of December 31.

An inked power purchase agreement with Genex Power to supply the proposed project was conditional on an FID being achieved yesterday.

But in an ASX statement early Thursday morning, Genex told the market both parties had agreed to extend the miner's deadline until March 31, 2024.

The parties also agreed to delay Genex's FID for its yet-to-be-built Bulli Creek Solar project in Queensland until April 2025, from which it would supply the power.

A Fortescue spokesperson reiterated that the company was progressing the project. 

"We are progressing our Gibson Island project, but we have more work to do," the spokesperson told Business News.

"We are approaching this project with the same financial discipline Fortescue has shown for 20 years."

Fortescue's proposed green energy project involved the development of a 500-megawatt hydrogen electrolysis facility capable of producing up to 70,000 tonnes of green hydrogen annually on Brisbane’s Gibson Island, which is already home to an ammonia plant.

That ammonia plant, owned by ASX-listed Incitec Pivot Limited, could then be upgraded to use the green hydrogen to produce up to 400,000 tonnes of green ammonia per year.

Commercial production from the proposed project was tipped to commence in 2026, according to the Andrew Forrest-led miner’s website.

The existing ammonia plant on Gibson Island in Brisbane. Photo: Fortescue

Fortescue had signed a 25-year power purchase agreement with Genex Power to buy 337.5 megawatts of energy from a yet-to-be-built solar farm, named the Bulli Creek solar project.

The 337.5MW of solar energy was intended to meet a portion of the renewable energy requirements for the proposed Gibson Island project, according to an ASX release.

Late last year when announcing FIDs for three other green projects, Fortescue commented on Australia’s "high green electricity costs" in an ASX statement. 

In that ASX release, the miner said the Gibson Island project was “requiring further work as Australia struggles to shed its petrostate status and still suffers structurally high green electricity costs”.

The power purchase deal was conditional on both parties reaching FID for their respective projects by 31 December 2023 for Fortescue and 31 December 2024 for Genex.

But both parties told the market a week out from the miner's due date that they had agreed to extend the Fortescue’s deadline until February 28 and Genex’s until March 2025.

When Fortescue confirmed the parties were pushing the date late last year, a spokesperson said the company had “every intention” of progressing Gibson Island to an FID.

“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 in December.

Fortescue previously stated it would make an FID on five green energy projects by the end of 2023 allowing first production in 2024, a plan that was seemingly scaled back after the miner’s board approved three projects in November.

It pushed ‘go’ on the first three green projects worth a total $1.14 billion, after its board approved FID on its Phoenix hydrogen hub in the US, its Gladstone PEM50 project in Queensland and its Christmas Creek green iron trial commercial plant in WA.

In that ASX release, Fortescue wrote these were three of the first green hydrogen deals ever to be progressed to FID in the US and Australia. It said this was “the start of a pipeline of green energy projects” it was “dedicated to delivering”.  

Details on the possible fifth green energy project are unknown.

Genex Power has been contacted for comment.