Strike energy $2.3bn fertiliser plant to create up to 1000 jobs
Strike Energy has unveiled plans for a $2.3bn fertiliser plant in Western Australia’s Geraldton.
Strike Energy has unveiled plans for a $2.3bn fertiliser plant in Western Australia’s Geraldton using gas from the energy producer’s Perth Basin deposits.
The oil and gas junior, whose high powered board includes ex-Fortescue Metals Group boss Nev Power and Future Fund and Crown Resorts director John Poynton, completed feasibility studies on a 1.4m tonne urea facility dubbed Project Haber which could create 1000 construction jobs
Gas would be supplied via a 120km pipeline from Strike’s Greater Erregulla development in the Perth Basin with expected consumption of 86 terajoules a day or 628 petajoules over 20 years. Gas accounts for about 60-70 per cent of the cost base for producing urea, according to Strike.
Project Haber also includes the construction of a 10MW hydrogen plant with gross fertiliser revenues estimated between $540m-$700m a year based on current urea prices after production starts in late 2023.
Talks have opened with several parties to either buy supplies from the facility or take an equity stake in the project with Strike to launch a formal tender in the second quarter of 2012. It aims to secure deals covering off 80 per cent of urea production prior to entering front-end engineering and design for the project.
Strike plans to keep 30 per cent of the project and will start marketing equity stakes to potential buyers in late 2021. The initial focus will be on supplying Australian farmers from Geraldton, at the northern end of WA’s wheat region where nearly a third of the nation’s urea consumption happens.
“Through ownership and integrating of Strike’s business with this infrastructure, Strike will have a 30-year home for its gas production that generates a product that has strong growth rates all whilst being a meaningful participant in the energy transition,” Strike managing director Stuart Nicholls said.
Strike operates the Erregulla field, 350km north of Perth, which is located next door to the giant Waitsia field which holds an estimated 844 billion cubic feet of gas and has been described as Australia‘s largest onshore conventional gas find for 40 years.
Strike estimates somewhere between 900bcf and 1.3 trillion cubic feet are in place at West Erregulla which it owns with Warrego Energy.
Strike rose 1.5 per cent to $33c giving it a market value of $560m.