Western Australia set for $4.3b urea plant after Woodside gas deal
Story from The Australian Financial Review: https://www.afr.com/business/energy/gas/west-australia-set-for-43b-urea-plant-after-woodside-gas-deal-20181120-h185dn
A $4.3 billion urea fertilisers plant proposed for Western Australia has taken a leap forward after private project backer Perdaman Group inked a large gas purchase contract with Woodside Petroleum that also gives a boost to the proposed $US11 billion ($15.2 million) Scarborough gas project.
Perdaman’s chemicals and fertilisers arm signed a binding deal with SNC-Lavalin for the construction of the plant, which will produce about 2 million tonnes a year of urea, mostly for the export market.
While Perdaman is still to lock in partners for the project and finalise financing and approvals, it is targeting early 2019 to begin construction. Chairman Vikas Rambal said it would kick-start a new wave of local manufacturing in the state.
Under the 20-year gas deal, which firms up an initial agreement announced in April, Woodside will supply 125 terajoules a day of fuel, mostly from its Scarborough field, which is also earmarked to supply an expansion of the Pluto LNG project.
Deliveries of gas are due to begin to the urea plant between 2023 and 2025 and the contract can be extended by five years to 25 years in total.
Woodside chief executive Peter Coleman described the deal as “significant”, noting it represented another step towards delivering the Burrup Hub, which would see gas supply and production optimised between the Pluto and North West Shelf ventures that lie close by each other on the Burrup Peninsula.
“The realisation of our vision for the hub will ensure that the world-class North West Shelf and Pluto facilities on the Burrup Peninsula are positioned to meet both domestic gas and global LNG demand for decades to come,” Mr Coleman said.
Woodside is targeting a final investment decision on the Scarborough project, which will also involve an additional LNG train to be built at the Pluto site, in late 2019.
Some 2000 jobs will be created during the three-year construction of the urea plant at Karratha, with 200 jobs involved once production starts. Perdaman estimates the project will bring some $US15 billion into the local economy over the life of the plant.
Meanwhile, Perdaman and Woodside agreed to co-operate on a hydrogen and gas technology park that is to be powered by renewable energy. The park would support the Burrup Hub and the development of a broader renewable energy economy in WA targeting the domestic and export markets.
The park, to be used for trials and field testing, is the latest of several alliances that Woodside has struck in its long-term push to develop a hydrogen business that would complement its LNG export activities.