European Union puts up $330m towards Fortescue’s planned green ammonia plant in Norway
Fortescue Energy boss Mark Hutchinson says a €200m ($330m) grant from the EU’s innovation fund puts the company a step closer to an investment decision on a Norwegian ammonia plant.
The European Union will chip in €200m ($330m) towards Fortescue’s plans to build a green ammonia production hub in Norway, with the mining major sharing in €3.6bn in grants from the EU’s innovation fund.
Fortescue Energy chief executive Mark Hutchinson told The Australian the grant brought the company’s Holmaneset project closer to fruition, but conceded the company would probably not meet its promise of delivering five final investment decisions in 2023.
Holmaneset is one of three projects that the Fortescue board “fast-tracked” in November, with the company making a final investment decision on a small hydrogen production facility in Gladstone in Queensland and another green hydrogen production plant in the US.
Mr Hutchinson said he hoped the EU grant would help deliver a final investment decision in Holmaneset within a few months, as the company firmed up the numbers on the project.
The Fortescue Energy boss said the company had already locked away 600MW of power agreements for the plant, with Fortescue planning production of about 300,000 tonnes of green ammonia a year for delivery into German industry.
Mr Hutchinson would not give a firm figure on the likely construction cost of the plant ahead of board approval of the project, but said it would probably be a “couple of billion”.
“It’s a similar size to a couple of other projects we’re doing. From a scale perspective, it’s in kind of a sweet spot – but 300,000 tonnes is still pretty big,” he said.
Mr Hutchinson said the plant would take green hydro-electric power from Norway’s grid.
The company is targeting the start of construction in 2025, and operations in 2027, pending final approvals from the Fortescue board.
“We have the land, we have the water, we have the power. And the engineering is very advanced, so it’s looking good,” he said.
“As a rule of thumb, if you can get your power in the $US35 to $US40 per megawatt hour range, you’re in good pretty good shape. We’re in that range.”
Last month the company said it had fast-tracked Holmaneset, a hydrogen project at Pecem in Brazil and an ammonia project in Kenya.
Brazilian President Luiz Inacio Lula da Silva last month announced Fortescue planned to spend $US5bn on building a plant capable of producing 300,000 tonnes of hydrogen a year.
Mr Hutchinson told The Australian the first stage of the Brazilian facility was likely to be on a similar scale as that of Holmaneset, suggesting a 50,000 tonne a year facility is in the planning.
Fortescue said the EU innovation grant would be made available in stages, on the completion of agreed project milestones, with the first instalment to be paid when the Fortescue board ticks off on a financial close of the project.
In November the Fortescue board ticked off on an investment decision in a $US550m liquid hydrogen plant in Arizona in the US, capable of producing 100,000 tonnes of green hydrogen a year for the domestic transport industry. Fortescue’s board also signed off on a $US150m plant in Gladstone in Queensland producing up to 9000 tonnes of hydrogen a year.
Fortescue shares closed up 39c at $27.85 on Friday.
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