A PROJECT based in the State's North West, 20 kilometres from Karratha, is set to supply Australia with 96 per cent of the urea it currently imports from international markets for agricultural use.
Last week, the Federal government, as part of the Northern Australia Infrastructure Facility (NAIF), committed $255 million for critical infrastructure supporting Perdaman Chemicals and Fertilisers' urea project.
The funding will aid Perdaman to get its $4.3 billion plant off the ground, allowing it to convert Western Australian liquefied natural gas into about two million tonnes of granular urea fertiliser per year.
With Australia importing about 2.4mt of urea for agricultural use each year, Perdaman's project will fill almost all of that requirement.
The two loans are the first NAIF investments into WA government entities and include:
- $160m to the Pilbara Ports Authority for a new multi-user wharf and facilities at the Port of Dampier.
- $95 million to the Water Corporation for the expansion of the Burrup seawater supply and brine disposal scheme that will connect to the Perdaman Urea Plant once built.
Agriculture and Northern Australia Minister David Littleproud said the NAIF commitment would help kickstart this new multi-billion-dollar industry.
"The NAIF's investment will provide farmers' access to locally manufactured fertiliser, securing our agricultural production and boosting our exports," Mr Littleproud said.
The NAIF loans build on WA government support for the project, which has provided $47.6m for road relocation costs, the detailed design of a new Dampier cargo wharf and upgrades to seawater supply infrastructure.
Any financial contributions for the WA government are subject to conditions, including the project reaching financial close and all statutory and regulatory approvals being met.
State Development, Jobs and Trade Minister Roger Cook said recent international supply chain issues have highlighted just how important urea is to industry sectors, such as agriculture and transport.
"Western Australia has the potential to supply these sectors with the urea they need," Mr Cook said.
"As the first new gas manufacturing project in the Pilbara for more than a decade, the Perdaman Urea Project will play a role in helping diversify Western Australia's economy and create local jobs."
The project has been estimated to create about 2500 jobs in construction and 200 ongoing operational jobs
The allocation of funding was welcome news from industry representatives, especially with fertiliser prices having increased dramatically since planting decisions were made for 2022, highlighting the need for an increased focus on local manufacturing.
Grain Producers Australia chairman Barry Large said they looked forward to engaging with representatives of Perdaman.
"We want to understand details of their initiative and how it can deliver better outcomes and practical results to support the long-term sustainability and profitability of Australian grain producers and communities," Mr Large said.
"Ultimately the key test for grain producers will be reliability of supply and prices paid, along with the capacity to deliver the necessary agronomic performance onfarm, including environmental sustainability and crop yields.
"Reducing the cost of key inputs for growers is critical to lifting the overall value and growth of our industry and providing certainty."
The Perdaman urea plant has been considered transformational for WA and was previously awarded Major Project Status by both the Federal and Western Australian governments.
In May last year, Perdaman announced it was on track to commence construction of the Karratha urea plant during the first quarter of 2022 and was scheduled to start production in the fourth quarter of 2025.
Perdaman was unable to comment at the time of going to print.
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