STRIKE Energy has secured a $6 million agricultural finance facility from Rabobank to support the property purchase for its proposed Mid West Low Carbon Manufacturing Precinct and Project Haber urea fertiliser manufacture near Three Springs.
Settlement on a binding $13.5 million agreement to buy 3500 hectares of freehold farmland in Three Springs Shire, which covers Strike's promising South Erregulla SE1 well and other gas discoveries, is due this month.
Strike Energy last week announced it had secured the Rabobank finance facility on a three-year term at interest rates "in line with market agri-lending".
The balance of the property acquisition will be supported from existing funds, Strike Energy said.
It intends to lease the property back to the previous owners to continue farming until it is ready to begin Project Haber and codevelopment with others of the Mid West Low Carbon Manufacturing Precinct, which is set to include a 100 megawatt wind farm, a 70mw solar farm, a manufacturing area and an area of carbon sequestration reafforestation.
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As previously reported in Farm Weekly, Strike has relocated its Project Haber urea manufacturing proposal from Geraldton to its proposed Mid West Low Carbon Manufacturing Precinct, 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.
Natural gas from SE1 will be its feedstock resource for urea production.
Strike also announced last week it has commenced marketing the opportunity to develop, own and operate the Mid West Low Carbon Manufacturing Precinct's renewable energy infrastructure.
It said there has been "substantial interest" and several of the "engaged counterparties" were also interested in potential renewable hydrogen integration for surplus power.
It pointed out the Mid West Low Carbon Manufacturing Precinct is "ideally located" to supply excess power generated to the State's electricity grid, being "in a Tier 1 wind resource location" and within 30 kilometres of a major 330kV distribution line at Three Springs and even closer to several 132kV lines.
The State government's decision to end coal-fired power generation by 2030 had "substantially increased the attractiveness of the renewable energy development" at the Mid West Low Carbon Manufacturing Precinct, Strike said.
It said it has also engaged with "multiple developers, owners of nearby carbon farms and carbon operating service companies" to explore models of how to proceed with planting of its proposed carbon farm.
It said it is looking to participate in some way in carbon credit generation and expects to make a decision on that in the near future.
Rabobank WA regional manage Steve Kelly said the bank was "very pleased to be providing the agricultural finance facility to support Strike Energy in acquiring property in its Mid West Low Carbon Manufacturing Precinct which will house the Project Haber fertiliser development".
"It is a very positive development for the agricultural sector in WA and Australia more broadly, to have a major low-carbon fertiliser production plant, which aims to ultimately manufacture three-quarters of Australia's urea fertiliser needs domestically," Mr Kelly said.
"The recent supply shortages and high prices for fertiliser globally - primarily due to the Russia-Ukraine war - demonstrate the advantages to be gained by having increased production of agricultural fertiliser on Australian shores.
"International prices for urea increased 11 per cent in the first half of August and Rabobank's research division sees substantial upside price risk for urea moving into the end of 2022, particularly in the wake of prices for natural gas reaching a record-high in Europe."
Urea is the most concentrated and most widely used nitrogenous fertiliser in broadacre cropping.
