The company behind an ambitious plan for a $4 billion fertiliser and petrochemical plant in Western Australia’s far north says it has secured finance, but an analyst is sceptical it will be able to procure the gas to operate the project.
- DFPC managing director Alfred Benedict says the company has secured finance for the $4.1b project through a Dubai-based backer and overseas banks
- The Shire of Derby West-Kimberley President Geoff Haerewa says the project is a “game changer” for the region
- Resource analyst Tim Treadgold says the project depends on extracting gas from the Great Sandy Desert, which has not yet been achieved
Little-known West Australian company, Derby Fertilisers and Petrochemical Complex (DFPC), plans to develop the ammonia, methanol, urea and complex fertiliser plant and power station near Derby using gas fracked by a third party in the Great Sandy Desert, and solar energy.
Managing director Alfred Benedict announced the company had an in-principle backing from Dubai-based group of companies, AJR Holding Group, to buy 100 per cent of their product.
He said the group would also be majority shareholders, with the rest of the finance approved by overseas banks.
But the project still has several hurdles ahead, including obtaining relevant construction, government and environmental approvals.
Then there’s the question of gas supply, crucial to creating their ammonia–methanol product.
Mr Benedict said they had signed a memorandum of understanding with Theia Energy to provide onshore gas to the project.
He said they would build a 280-kilometres pipeline, costing close to $300m, to deliver the gas to the plant.
“We are very sure, based on what they have, that there will be enough gas available in the region from that valve to support this project,” he said.
But not everyone is as confident in that supply.
Gas supply questioned
Resource analyst Tim Treadgold said he remained far from convinced their gas supply was a sure thing.
“If they’ve got the money and if they’ve got the market and if they’ve got the site and if they’ve got the raw materials then, yes, they’ll have a project,” he said.
“Theoretically it’s there, but you’re going to have to do an awful lot of exploration, and so far that exploration has not been successful.”
Mr Treadgold said there were several hurdles to overcome yet.
“There’s the State Government hurdle; there’s the environmental hurdle; there’s the local community hurdle,” he said.
Gas supply was the factor that undid the company’s previous plans to set up in Darwin.
Substantial interest in fertiliser industry
The fertiliser production industry is proving popular in Western Australia, with two other proposals also on the drawing board.
Perdaman Industries plans to begin constructing its $4.5b fertiliser plant in Karratha this year, while Strike Energy is progressing with plans for a $2.3b ammonia–urea manufacturing development called Project Haber to be developed near Geraldton.
Mr Treadgold said there were also several potash mines being developed in the state.
“Fertilizers are in demand,” he said.
“But it’s a very competitive area.”
“Game changer” for region
The Shire of Derby West–Kimberley has signed a letter of support for the Derby Fertilisers and Petrochemical Complex project.
If developed, the project is flagged to create 1500 direct construction jobs and 500 ongoing operational jobs.
DFPC has also promised to provide subsidised water and power to the region.
Shire President Geoff Haerewa described it as a “game changer” for the region.
“Subsided power obviously make the place more liveable and more affordable and entices people to come and live in Derby,” he said.
“It also gives unprecedented opportunity for Aboriginal-owned companies and corporations and local businesses around the Kimberley, so I’m looking forward to this getting over the line.”
Mr Haerewa, who is also running as the candidate for the Liberal party for the Kimberley seat, said he would be lobbying both sides of parliament to make sure the project got over the line.
DFPC managing director Mr Benedict said they hoped to secure approvals in eight to 10 months and begin construction and be in full production by the last quarter of 2024.
The company’s long term plan for the plant is to transition to 100 per cent solar energy, instead of gas, after 15 years.