Carlyle-backed Amp Energy chosen for SA green hydrogen project
Canada’s Amp Energy, backed by private equity giant Carlyle, has been chosen to develop a major green hydrogen project in South Australia.
Canada’s Amp Energy, backed by private equity giant Carlyle, has been chosen to develop a major green hydrogen project on South Australia’s Eyre Peninsula.
The agreement with ASX-listed iron ore explorer Iron Road follows a market sounding process launched by Iron Road last year to identify commercial interest in developing a green hydrogen energy, export and industrial hub at Cape Hardy, between Tumby Bay and Arno Bay.
Iron Road owns more than 1200ha of greenfield land around Cape Hardy, where it has development approval for a deep sea port to support its proposed iron ore mine near Wudinna.
The federal government has committed $25m towards development of the port.
As lead developer of the hydrogen project, Amp plans to develop and build up to 5GW of electrolyser capacity over the next decade in the precinct, producing more than 5 million tonnes of green ammonia annually.
The company owns feedstock generation assets, transmission, processing and export operations globally, and is among the largest hydrogen developers in Australia, where it is progressing the development of 20GW of electrolyser capacity.
Co-founder and chief investment officer Paul Ezekiel said the port development, access to high voltage transmission infrastructure and the South Australian state government’s green hydrogen agenda made Cape Hardy a promising proposition.
“Our background of developing large scale upstream power systems globally positions Amp for the emerging opportunity of green hydrogen and provides industrial synergies,” he said.
“The development of strategically located, transmission-connected green hydrogen and ammonia facilities at select locations such as Cape Hardy in South Australia is critical to our continued global growth and long-term strategy.”
Amp expects that the project will create 4800 direct and indirect construction jobs and 250 direct and indirect ongoing jobs once fully operational.
As part of the deal with Iron Road, Amp will enter a nine-month exclusivity period, paying an upfront fee of $1.5m.
A second $1.5m payment will made if and when the transaction proceeds, subject to Australian Foreign Investment Review Board approval for Amp entering into long-term land lease agreements with Iron Road.
A further $21m in staged payments would then be made leading up to the first production.
Ongoing royalties for exports from the Cape Hardy precinct are still being negotiated.
The hydrogen project is expected to occupy about a third of Iron Road’s 1207ha site.
Iron Road chief executive Larry Ingle said Amp would now complete early feasibility and master planning work, and as lead developer, would assemble other consortium partners.
“We are delighted to be working exclusively with Amp for the next nine months, and beyond, on a green energy production and export development opportunity of national significance,” he said.
“This important milestone further validates Cape Hardy as South Australia’s pre-eminent hydrogen export hub of scale.
“Our competitive offer-to-bid process was carefully designed to screen the most capable and motivated developer looking to prioritise and advance the project quickly and judiciously.”
The latest timeline provided by Iron Road has a final investment decision being made by the end of 2025.
SA Premier Peter Malinauskas said the Cape Hardy project complemented the state government’s $593m Hydrogen Jobs Plan.
“The Cape Hardy precinct speaks to our state’s hydrogen production capabilities,” he said.
“The hydrogen opportunity will be transformative for the South Australian economy, delivering energy security – while helping the state decarbonise.”
In 2021 Amp launched its Renewable Energy Hub of South Australia, a $2bn investment in renewable generation and battery storage infrastructure, established following its acquisition of solar generation assets from EPS Energy.
Iron Road shares were trading steady at 10.5c in afternoon trade.
More Coverage
Carbon credit price at year high as tighter rules canvassed
The price of Australian Carbon Credit Units is at a year high as consultation opens on new rules which would demand more information about carbon farming projects.
WA loosens domestic gas restrictions until 2030
Western Australia will allow new or expanded onshore gas projects to sell 20 per cent of supplies overseas, in a bid to incentivise new production by dangling short-term sweeteners.