Australian Fertilizer Corporation Secures $2.4B Urea Sales Deals
Synopsis
Australian Fertilizer Corp has long-term contracts to sell about A$2.4 billion ($1.5 billion) of all output from the urea plant its plans to build at Gladstone. The project will generate 220,000 tonnes of technical-grade urea each year and is still in the financing and approvals stage.
Australian Fertilizer Corporation has sold the entire output of its proposed urea plant in Gladstone, Queensland, under contracts worth about $2.4 billion for 10 years.
The company will develop a 220,000 metric tonnes-per-annum technical-grade urea facility at the site of an ammonia export project previously proposed for the Port of Gladstone that lies approximately 530 kilometres north of Brisbane.
Production Fully Contracted Under Multi-Year Contracts
Chief executive Stein Haugan said all planned production from the facility over the next ten years has already been contracted for. The primary product produced by the plant will be AdBlue, an emissions control solution for diesel vehicles, he said.
One Australian company has been able to secure exclusive rights over the Australian market according to Haugan, and another major international producer and marketer of the same product will have the exclusive rights overseas.
As nations rose stricter exhaust principles there has been an expanded interest for specifically AdBlue far and wide. In Australia all new vehicles must comply with Euro 6d standards similar to an EU2920-compliant vehicle and under the right conditions requires AdBlue for some models.
Haugan noted global demand for technical-grade urea is fast-growing because of environmental laws, and expects Australian requirements will also rise.
Project Seeks Funding and Approvals
After the Gibson Island facility at the Port of Brisbane closed, Australia is now entirely reliant on urea imports. Instead of building it on natural gas to produce, it proposed the Gladstone plant would consume mining by-products such as old tyres, biomass and solid waste. Haugan said both the United States and China already use technology to do similar work.
It is also working to establish at least two extra factories on the east coast of Australia, primarily aimed at meeting agricultural demand. According to Haugan the plan is to produce around 1 million tonnes of urea in about one decade; much of which would be sold into Australia.
Hamish McIntyre, president of the National Farmers Federation, said strengthening Australia’s manufacturing capability and food security was enhanced by such proposals. He also said he hoped the project goes beyond just AdBlue production into a wider range of paddock-grade urea for agriculture as well.
The Gladstone project remains looking for funding and development permits. Construction, if successful, could start within two years. McIntyre called on governments to support the production of more locally manufactured goods and not impose regulations that may make projects harder to develop.
Earlier this week the federal government said it would bring in three new fertiliser shipments over the coming weeks. McIntyre said fertiliser supply pressures have eased, but prices are not yet going back to normal.
FAQs
What Amount are the Sales Agreements?
Contracts are for approximately $2.4 billion each over 10 years.
What will be the primary output of the plant?
Primary product will be AdBlue which is consumed for the cleaning of emissions from diesel vehicles.
Where is the facility being built?
The plant is slated for the Port of Gladstone in central Queensland.
Has construction started?
The project is still raising funds and getting development approvals.
Source: ABC news
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