INTEGRATED renewable energy could make granulated urea fertiliser produced at the proposed Mid West Low Carbon Manufacturing Precinct, in the Shire of Three Springs, the least carbon intensive urea in the world.
Strike Energy made that claim in its quarterly activities report last Friday to the Australian Securities Exchange (ASX).
Explained in the report and as previously reported in Farm Weekly, Strike has signed a binding agreement to buy 3500 hectares of farmland which covers the site of its South Erregulla 1 (SE1) natural gas discoveries.
It intends for SE1 to provide gas feedstock for Project Haber, its proposal to produce 1.4 million tonnes of granulated urea fertiliser a year.
Strike has relocated Project Haber from Geraldton to the Three Springs site, which it has named the Mid West Low Carbon Manufacturing Precinct.
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It is assessing potential partners to co-develop wind and solar power generation projects and a more than 1500ha carbon farming revegetation sequestration project for the precinct.
Strike is also seeking "low carbon manufacturing collaborations" from other industries prepared to move to the precinct.
"These discussions have subsequently commenced with strong early interest from carbon farm participants and renewables developers, given the State government's commitment to exit coal-fired power by 2030 and that the 330 kiloVolt transmission lines are less than 30 kilometres from the precinct," Strike said in the report.
Proximity to power grid transmission cables capable of accepting, as well as delivering, high voltage power is an important consideration and one that has stymied some alternative power generation projects proposed in the past near the extremities of the power grid.
"Relocation of Project Haber to the precinct, coupled with the co-located renewable energy generation opportunities, has the potential to materially benefit the project's economics and carbon footprint," Strike said.
Apart from a capital cost saving of $85 million from not having to build a 105km gas pipeline to Geraldton, integration of up to 170 megawatts of onsite renewable energy will displace 5-10 terajoules per day of previously required gas consumption, it said.
When Project Haber was proposed in a Geraldton industrial area, piped natural gas was to be both the main ingredient for urea production and the fuel used to generate power to process the gas into urea.
"With Project Haber (relocated to the Mid West precinct) being able to have a dedicated stream of renewable energy into the plant, substantial gas-fired power can be avoided," Strike said in Friday's report.
"This will mean with renewable energy integration that Project Haber will have an estimated final emissions intensity of only 0.38 tonnes of CO2e (environmental carbon dioxide) per tonne of urea, which on production would make it the least carbon intensive urea fertiliser product in global circulation."
There are also further "offset opportunities" from the carbon farming proposal, it pointed out.
As a separate project, Strike is assessing a broader area in the Mid West for geothermal power generation potential.
As previously reported, during the quarter Strike flow tested the SE1 well and achieved some of the highest sustained flow rates from Kingia sandstone at 4844 metres depth, with good quality gas composition, low impurities, no sand and no water.
It plans to reset test equipment and pipework to flow test Wagina sandstone - overlaying the Kingia sandstone - gas reserves in the same well later this month.
Discussions with technology license holders on autothermal reacting and ammonia (the first step in producing urea), urea production and granulation are continuing, Strike said.
In the last quarter it had issued a tender for design of a turnkey urea operation that allowed for initial front-end engineering and design to progress seamlessly to an engineering, procurement and construction phase, pending a final investment decision on Project Haber.
Strike said it is preparing "key regulatory environmental approval applications" for submission in the next quarter and has completed extra baseline surveys, cultural heritage clearance work - mapping significant plant and indigenous well sites - and technical studies, as well as modelling for the inclusion of the precinct's renewable energy.
It noted in the report the State government had announced a $332m upgrade for Geraldton Port to provide extra capacity, including a new berth with ship loading facilities, material handling infrastructure, a multiuser storage facility, two truck unloaders and road works to facilitate increased truck movements.
"Strike is positioning to be a major proponent and beneficiary of this State government investment into the Geraldton Port infrastructure," it said.
Strike has entered a non-binding agreement with American fertiliser giant Koch Fertilizer and is negotiating a 10-15 year offtake agreement with Koch for 1.4mt of urea a year for global distribution.
It is negotiating with trucking contractors to get urea from plant to port and also "for distribution of urea from the plant to farms throughout WA".
Strike's managing director and chief executive officer Stuart Nicholls said in the report the company had made "substantial progress" towards achieving Project Haber development milestones and its corporate commitment to net zero emissions by 2030.
"Strike's Perth Basin track record across multiple geological plays has been nothing short of outstanding and the company is now working to convert this upstream success into long-term shareholder value through our innovative integrated gas, renewables and fertiliser development strategy," Mr Nicholls said.
Urea is the most concentrated and most widely used nitrogenous fertiliser in broadacre cropping and most of the 2.4mt of urea used by Australian farmers each year is imported from the Middle East and South East Asia.
An Incitec Pivot Fertilisers plant in Brisbane - the only current local manufacturer of granulated urea - is due to close at the end of the year because of gas supply shortages and high price in Eastern States.
