The world's largest ammonia plant began operations on the Burrup Peninsula today, but high gas prices may force future projects offshore, most likely to Papua New Guinea.
The world's largest ammonia plant began operations on the Burrup Peninsula today, but high gas prices may force future projects offshore, most likely to Papua New Guinea .
Indian-owned Burrup Fertilisers Pty Ltd constructed the $787 million plant, which is expected to produce up to 760,0000 tonnes of liquid ammonia per year during its 25-year contract to purchase natural gas from the North West Shelf.
Ammonia from the plant will be used predominately to create fertilisers for Indian agriculture, with the first shipment scheduled for mid-May.
It is the biggest Indian investment ever made in Australia and was the project that triggered the state government's establishment of a $134 million multi-user infrastructure package on the Burrup a few years ago.
The first shipment from the world's largest ammonia plant in northern Western Australia will leave the Port of Dampier next month.
But high gas prices mean that along with it will almost certainly go the construction of an associated $2.7 billion urea plant and a $411 million ammonium nitrate plant, by the same owners, probably to Papua New Guinea.
The consequent loss to the WA economy of these downstream processing industries will be enormous.
Over 70 per cent of the BFPL ammonia project's costs are in the price of gas.
Since the original gas price was struck, the price has more than doubled, and BFPL chairman Pankaj Oswal told WA Business News that the plant would not be built at today's gas prices.
A final decision on the ammonium nitrate plant was still six months away, and Mr Oswal said, "we would love to do this project in WA, but I cannot justify the gas price to the board or the banks."
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World's biggest ammonia plant begins operation in the Pilbara.
Premier Alan Carpenter today welcomed the completion of the world's largest ammonia plant, located on the Burrup Peninsula in Western Australia's Pilbara region.
Indian company Burrup Fertilisers Pty Ltd built the $700million plant, which is expected to produce up to 760,0000 tonnes of liquid ammonia per year throughout the company's current 25-year, take-or-pay contract to purchase natural gas from the North West Shelf.
Mr Carpenter said the plant was the first major Indian capital investment in WA's
value-adding gas processing industry.
"Burrup Fertilisers has established a world-scale, export-orientated ammonia plant that will use the vast natural gas resources of the North West Shelf region of WA," he said.
"This project will significantly boost WA's growing trade relationship with India, a country which is emerging as a major global economic player.
"India is now WA's fourth biggest trading partner, up from 16th in 2002-03, with bilateral trade worth $3.1billion.
"This accounts for more than 40 per cent of Australia's entire trade with India, which is just under $7.5billion."
The Premier said the development of the plant had already increased local and regional business activity by an estimated $30million a year.
"Burrup Fertilisers created more than 1,100 jobs during the plant's construction phase and about 100 people will be employed at full production," he said.
"In addition, the plant will provide ongoing employment to many Western Australians in the supporting operational, service and maintenance industries."
Ammonia from the plant will be used predominately to create fertilisers for Indian agriculture, with the first shipment scheduled for mid-May.
