A small Perth company with backers in Dubai has announced ambitious plans for a $4.1 billion project to convert gas from the Canning Basin into fertiliser and petrochemicals.
A small Perth company with backers in Dubai has announced ambitious plans for a $4.1 billion project to convert gas from the Canning Basin into fertiliser and petrochemicals.
The project proponent is Derby Fertilizer and Petrochemical Complex Pty Ltd, which was registered in July last year with paid-up capital of $10 million.
Its managing director is Alfred Benedict, whose past experience includes commissioning and operating the Burrup Fertilisers plant.
Mr Benedict insisted today his project had no links to Pankaj Oswal, the controversial founder of Burrup Fertilisers who left Australia in 2010 and was last known to be in Dubai.
Mr Benedict, who has a 90 per cent stake in DFPC, has struck an agreement with Dubai-based ARJ Group to become the majority shareholder and major backer of the Derby project.
ARJ is a diversified group that says it has 2,500 employees across 18 countries.
Speaking from Dubai this morning, chairman Mohammed Juma said his group has also committed to an offtake agreement for 100 per cent of the Derby project’s output.
Mr Benedict said he had been working on the project for two years.
His original plan to was to build in Darwin but switched to Derby in order to secure gas supplies.
“We were not able to secure enough gas in Darwin in time for the project,” Mr Benedict said.
At a contract signing in Perth this morning, Mr Benedict signed memorandums of understanding with three companies planning to support the project.
These include South Perth-based Theia Energy, which aims to supply gas to the fertiliser project.
Theia is an early-stage exploration company owned by Jan Ostby (who also leads Finder Energy) and plans to employ ‘racking to develop its fields.
Theia has drilled just one well in the Canning Basin and plans a second well in 2022 or 2023.
However, chief operating officer Jop van Hattum said that, after studying 60 other wells and 2D seismic surveys in the region, it had estimated its reserves between 3 billion and 5 billion barrels of oil equivalent.
Alfred Benedict signed an MOU with Theia Energy director Jan Ostby.
Mr Benedict said the Derby project planned to transition over time to 100 per cent renewable energy.
That plan was based on an MOU with Chinese company Shanghai Electric, for the design and construction of a 100-megawatt solar power plant at Derby.
DFPC has also signed an MOU with Danish process engineering company Haldor Topsoe.
“Everything is aligning to make this flagship project a success,” Mr Benedict said.
“Derby has the port infrastructure and is in close proximity to the land-based gas fields and the excellent renewable availability we need.”
Mr Benedict said he was very confident Theia would be able to supply sufficient gas for the project.
He was also confident in the capacity of Derby to support such a large project.
DFPC has estimated the project will create 1,500 direct construction jobs and 500 direct and indirect operational jobs for 25 years.
The Shire of Derby-West Kimberley and the local Karajarri people were represented at today’s event, but not the state government.
The Karajarri Traditional Lands Association entered into an Indigenous Land Use Agreements (ILUA) with Theia Energy in August last year.
Mr Benedict said he would focus on completing engineering studies and obtaining approvals over the next six to 10 months.
He was aiming to start construction later this year and commence production in the fourth quarter of 2024.
The project aims to produce 3,500 tonnes per day of ammonia and 5,000t/day of methanol, with ARJ planning to sell the product to customers in Japan.
Mr Benedict said that all three directors of DFPC had worked on the Burrup Fertilisers project at various times.
He said his companies had been contracted to commission, operate and maintain Burrup Fertilisers for a total of nine years.
A second director, Amir Aziz, is chief executive of Aescon Engineering, an Australian-owned group with its head office in Dubai.
Aescon’s website states that the company’s origins extend back to the year 2000 through the establishment of a small services business in Western Australia.
It lists Burrup Fertilisers and its associated desalination plant as two of the four projects it has worked on.
The Burrup Fertilisers project is now owned and run by Norwegian company Yara International, which secured control after Mr Oswal ran into financial difficulties and moved to Dubai.
Derby Fertilizer’s third director is Arumugam Ramalingam, the Perth-based operations director at a company named Total Reliable Solutions Pty Ltd
Today’s announcement adds to three big value-adding gas projects in the works in WA.
The biggest is Perdaman Industries' $4.5 billion urea project, led by Vikas Rambal.
Mr Rambal was one of the original backers of the Burrup Fertilizers’ project before he had a major falling out with Mr Oswal.
Perdaman is aiming to make a final investment decision mid-year for its project, which would be built on the Burrup Peninsula.
Chemical company Coogee has been seeking to develop a methanol project, worth $1 billion, also on the Burrup.
ASX-listed Strike Energy announced earlier this month plans for a $2.3 billion urea project at Geraldton.
The oil and gas producer told the ASX the plant had been through a year of feasibility work with TechnipFMC.
It will produce 1.4 million tonnes of urea annually, a chemical used as a fertiliser.
