Perth company Perdaman has started work on one of WA's largest projects after gaining backing from Global Infrastructure Partners, the same group that backed Woodside’s Pluto gas project.
Perth company Perdaman has started work on its giant urea project in the Pilbara after gaining backing from Global Infrastructure Partners, the same group that backed Woodside’s Pluto gas project.
GIP has committed to invest over $2.1 billion in the project through an equity investment.
With the project having a total budget of $6.4 billion, this equity investment is likely to make GIP the project’s largest shareholder alongside Perdaman.
The project has also secured debt funding from 12 commercial lenders and two government agencies: the Northern Australia Infrastructure Facility (NAIF) and Export Finance Australia (EFA).
Today’s announcement caps off nearly a decade of work by Perdaman and its executive chairman Vikas Rambal to get the project under way.
Its facility, to be constructed on the Burrup Peninsula near Karratha, will be one of the largest urea plants in the world, with annual production of 2.3 million metric tons.
On completion of the project, expected in 2027, Perdaman will be Australia's leading fertiliser producer.
Perdaman said the facility would help to address the growing demand for high-quality fertilisers and reduce the nation's reliance on urea imports, which total about 2.4 million tonnes per year.
The facility will process gas from Woodside’s Scarborough project while the urea will be sold to fertiliser company Incitec Pivot, which inadvertently revealed the project’s financial close in an ASX release last week.
The project will create around 2,000 jobs during the four-year construction phase and 200 permanent operational jobs in Karratha.
"We are excited to be constructing Australia's largest ever downstream manufacturing project which represents a significant investment in Australia's manufacturing sector," Mr Rambal said.
"This state-of-the-art facility will help to ensure that Australia has a secure and reliable source of high-quality urea, supporting our nation's farmers and food producers.”
Perdaman said construction of the project would begin immediately and would be managed by EPC contractors Saipem and Webuild.
Perth-based Clough was originally an EPC contractor, however, it went into voluntary administration late last year and its interest in the project was bought by Webuild.
The project, along with Woodside’s Pluto project, has been opposed by some traditional owners because of concerns they will damage ancient rock art on the Burrup Peninsula, also known as Murujuga.
Perdaman touched on this issue by thanking the Murujuga Aboriginal Corporation and Murujuga Circle of Elders “for sharing their time, knowledge and guidance during extensive consultation and looks forward to a long-term relationship”.
In a similar vein, State Development Minister Roger Cook said “we know that Perdaman has worked closely with the Murujuga Aboriginal Corporation to ensure that industry can co-exist and thrive alongside the cultural values of the traditional owners”.
But that was not enough for Greens Senator Dorinda Cox.
“Manufactured consent, consent obtained through coercion, or by limiting the rights of First Nations people goes against the United Nations Declaration on the Rights of Indigenous People,” she said.
Senator Cox said it was premature for government ministers to be on the Burrup to mark the start of construction when a determination on a section 10 assessment had not been made.
Environment Minister Tanya Plibersek has previously dismissed calls from some traditional owners to block the project, saying Murujuga Aboriginal Corporation is the accepted representative body.
Premier Mark McGowan, who attended a sod-turning event today, said the project represented a significant investment in the Pilbara and Western Australia.
“My government is proud to support developments like the Perdaman urea project that will deliver decades of economic benefits for WA, creating local jobs and diversifying the Pilbara economy,” he said.
Resources Minister Madeleine King said the project was a leading example of how the Albanese government was supporting northern Australia, creating jobs and supporting industries of the future.
The project has obtained significant support from various government agencies.
NAIF will lend $159 million to the Pilbara Ports Authority for a new multi-user wharf and facilities at the Port of Dampier and $96 million to the Water Corporation for the expansion of the Burrup seawater supply and brine disposal scheme, as announced last year.
Additionally, more than $50 million in funding has been committed to support early design works and upgrades to infrastructure, including road works, the new Dampier cargo wharf and the water supply infrastructure.
Export Finance Australia will provide a $269 million loan to the project, alongside NAIF and the 12 commercial lenders.
Perdaman has also been allocated land in the Maitland strategic industrial area, about 40 kilometres from the Burrup Peninsula, to support its plan to construct a 100-megawatt solar power facility.
This is part of the company’s efforts to decarbonise its urea project.
The proposed facility will complement a 50MW solar facility already announced alongside Woodside.
Perdaman said it would now begin engagement with state and local authorities as well as local traditional owners about developing the solar project.
EY acted as equity financial adviser to Perdaman on the project, Societe Generale acted as debt financial adviser, whilst White & Case acted as legal adviser.
Allens acted as legal adviser to GIP, which in 2021 agreed to acquire a 49 per cent equity interest in the $7.6 billion Pluto train 2 project.
The ‘train’ will process gas from Woodside’s offshore Scarborough gas field, with Perdaman being one of the main customers for Scarborough gas.
Today’s news means GIP is a major investor in the two largest onshore resources projects under way in WA.
* The next edition of the Business News magazine, out on Monday, will have a wrap-up on major resources projects under way and planned.
