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Australia’s Strike gets govt support for urea project

  • Märkte: Fertilizers, Natural gas
  • 15.12.21

Australian independent Strike Energy has received support from the Australian federal government and the Western Australia (WA) state government for its proposed A$2.5bn ($1.78bn) 1.4mn t/yr Haber urea project in the mid-west of WA.

The support comes given current concerns of about global shortages of urea and its derivatives such as diesel exhaust fluids (DEF), also known as AdBlue.

Canberra awarded a A$2mn grant to Strike through its supply chain resilience initiative programme and has been elevated in the WA government project planning process, Strike said. The grant to Strike follows the Australian government forming a taskforce to address a potential shortage of AdBlue, which includes procuring urea.

There is a global shortage of urea from the northern hemisphere energy crisis, Strike Energy said. The energy shortfall has resulted in significant quantities of urea manufacturing capacity being shut in, as gas feedstock have been diverted from industry to primary use of power and heating, the Perth-based firm said.

Major urea exporting nations such as Russia, Egypt and China have placed restrictions on urea exports and amplified the current supply shortage, it said. This has translated into international urea pricing surpassing all-time record highs with fob Middle East prices exceeding $1,000/t in the spot market, Strike said.

Australia is on course to have zero domestic urea production capacity by December 2022, with Incitec Pivot closing its Gibson Island production facility.

In addition to urea in short supply for agricultural purposes, a secondary impact is the availability of AdBlue, a fluid used to reduce nitrous oxide in modern diesel and freight engines, Strike said.

AdBlue availability is forecast to start impacting international and Australian supply chains within the January-March 2022 quarter, unless additional capacity is either built or supplies of urea rise, it said.

Strike plans to send 22pc of its urea production into the WA domestic market and 50pc to the rest of Australia and to export the remaining 29pc to international markets.

The Haber urea plant will use gas from the Greater Erregulla gas field plan whereby under phase one of the joint venture will bring 80 TJ/d (2.14mn m³/d) of gas from the West Erregulla field in the onshore Perth basin to market in 2022, via a gas plant to be built, owned and operated by Australian Gas Infrastructure Group, which is owned by Hong Kong-based conglomerate CK.

The West Erregulla field is jointly owned by Strike and fellow Australian independent Warrego Energy. Under phase two of the plan, up to 300 TJ/d could be brought to market via West Erregulla and Strike's 100pc-owned South Erregulla field, it said.

Strike has a cooperation agreement with the Mid West Ports Authority to progress access to the Geraldton port and associated facilities for urea shipping.

Strike plans to seek interest from equity partners to fund the capital requirement of the project, with Strike expecting to retain a 30pc the Haber urea project. The firm is planning to complete engineering studies in 2022 and starting construction in early 2023.


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