Strike Energy to develop manufacturing precinct at Three Springs

Strike on Tuesday told the Australian Securities Exchange (ASX) it has entered into a binding agreement to purchase 3500 hectares of freehold farmland in Three Springs shire which covers its promising South Erregulla SE1 well and other gas discoveries.

It told the ASX it plans to relocate its proposed Project Haber urea fertiliser plant from Geraldton to its Three Springs property, saving $85 million in the project's capital cost by not having to build a 105 kilometre gas pipeline from the SE1 well to Geraldton.

The Three Springs site would provide an industrial envelope for Project Haber, its operations and construction camp, with surplus land left for possible expansion, Strike said.

It said the site also provided potential for integration into the project of a 100 megawatt wind farm and a 70mw solar farm, with the electricity generated replacing 5-10 terajoules of gas consumption a day.

The same 300 metre high ridgeline that runs through Strike's property is already the location for four of the top 10 most productive windfarms in Australia - Yandin, Badgingarra, Mumbida and Emu Downs.

According to Strike, the renewable energy would help make it one of the lowest carbon urea fertiliser producers in the world and potentially reduce its urea production cost by about five per cent.

There would also be room for a potential research and development grain farm for fertiliser product testing and up to 1500ha of potential revegetation and carbon farming or offset land - the site sits over a Jurassic-aged carbon sequestration sandstone reservoir, as well as the South Erregulla Kingia and Wagina low impurity gas fields.

According to Strike, the emissions profile of urea fertiliser produced at its proposed Mid West Low Carbon Manufacturing Precinct would see an estimated 50pc carbon reduction against current imported urea, with a final carbon intensity of about 0.47 tonnes of environmental carbon dioxide per tonne of urea.

Strike has said it would likely seek "other proponents" who may join it in developing the precinct.

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It said it is prepared to make surplus renewable energy and gas available to other low-carbon manufacturers prepared to join it at the Mid West Low Carbon Manufacturing Precinct.

A $13.5m settlement for the land is expected later this year.

Strike has agreed to lease the farmland back to the current owners on a periodic lease at standard commercial rates until development of the precinct begins.

Deputy Premier and Minister for State Development, Roger Cook welcomed Strike's proposal to relocate Project Haber to near Three Springs.

"The State strongly endorses Strike's decision to take advantage and integrate the Mid West's vast renewable energy, gas and carbon sequestration opportunities via the relocation of Project Haber to Three Springs," Mr Cook said.

"The pursuit of a low-carbon manufacturing precinct has the opportunity to generate substantial regional prosperity through major job creation and import substitution.

"Through projects like this, Western Australia continues to demonstrate that it will be a global development powerhouse in the transition to a low carbon and ultimately net zero economy."

Strike's managing director and chief executive officer Stuart Nicholls said its proposal to produce low carbon urea using renewables where possible demonstrated its commitment to net zero emissions by 2030.

"Strike continues to display sectoral leadership through its strategic development approach at Project Haber, in utilising its natural resource endowment in partnership with world class renewable energy in the Mid West to manufacture globally low carbon critical agricultural commodities," Mr Nicholls said.