09/04/2021 - 12:06

Strike bullish on urea plant

09/04/2021 - 12:06

Bookmark

Save articles for future reference.

Strike Energy's plan to build a $2.3 billion urea plant at Geraldton has firmed after the company today revealed it was heavily oversubscribed with offtake offers for its projected 1.4 million tonnes of annual production.

Strike bullish on urea plant
Stuart Nicholls.

Strike Energy's plan to build a $2.3 billion urea plant at Geraldton has firmed after the company today revealed it was heavily oversubscribed with offtake offers for its projected 1.4 million tonnes of annual production.

The oil and gas producer told the ASX more than 12 buyers had participated in an expressions of interest process for long-term offtake at the development, which had been christened Project Haber. The terms varied between 3 and 10 years and further expressions of interest were expected.

Before announcing its plan earlier this year, Strike completed a year of feasibility work with TechnipFMC. The company said Technic had now commended the pre-freed scope of work to refine the cost estimate for the plant.

In a statement, Strike Energy managing director and chief executive Stuart Nicholls said the support from potential buyers had been "overwhelming".

"This is a function of the strategic location of this urea supply in Australia and the events of the previous 16 months highlighting the risks of relying on international supply chains for critical commodities required by our domestic economy," he said.

“I am immensely proud that we are doing everything we can to incorporate as much green energy from our own portfolio and the region into the manufacturing process. These pursuits may see some of the first green fertiliser produced in the world right here in WA, which will cement a valuable partnership between our low-cost gas resources and Australia’s transition to a low carbon economy.”

Strike also announced transportation and logistics studies had found Project Haber had shipping advantages over international competitors that would make it the lowest-cost supplier of urea fertiliser to South Eastern Australia. The company said it was in discussions with the Mid West Port Authority to secure a berth and port access agreement.

Strike shares opened the day at 36c, rising to 38c by lunch time, which gave the company a market capitalisation of $655.5 million.

The project itself will be built at a 60-hectare site at Narngulu Industrial Estate, where Strike has secured a lease option with DevelopmentWA. Gas will be piped as a feedstock from its West Erregulla development in the Perth Basin.

Over a 20-year timeframe, Haber will use about 628 petajoules of gas, while a 10 megawatt geothermal-powered electrolyser is expected to provide about 2 per cent of the hydrogen input.

The company said other green hydrogen developers had engaged with Strike over the possible sale of green hydrogen/ammonia products to Project Haber.

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options