Ammonia
Infrastructure and gas supply are the key issues when it comes to sniffing out the best place to build an ammonia plant, according to two people in the know.
“For us infrastructure was vital,” Burrup Fertilisers director corporate Wolfgang Jovanovic said.
His company recently commissioned the world’s largest ammonia plant, located on the Burrup Peninsula in Western Australia.
The $A800 million plant, which will produce up to 760,000 tonnes of liquid ammonia per year for export, became the first of five new projects planned for the Burrup to go ahead. It also spurred the State Government to inject $134 million to upgrade and develop infrastructure in the region.
An underground natural gas pipeline was built to take feedstock to the plant, while another pipeline above the ground pipeline takes ammonia from the facility to the Dampier Public Wharf. At same time, a 1.2km seawater pipeline runs from a desalination plant and connects to the brine discharge line.
On the other side of the country, another company, WestSide Energy, aims to build its own ammonia plant before the turn of the decade. WestSide’s 360,000 tonne per year facility is to be based in Gladstone, Queensland to supply the growing domestic fertiliser market.
Managing director Angus Karroll agrees with Jovanovic about the importance of existing infrastructure when looking at sites to develop an ammonia plant.
“The key for downstream industries is that the infrastructure is already there,” Karroll said.
“The Queensland Government has been really pro-active in this area – the port infrastructure’s there, so is the power and the water.”
In an effort to secure its feedstock supply, WestSide recently signed a farm-in and offtake agreement with coal seam methane junior Sunshine Gas to lock in the first 250 billion cubic feet of gas produced from several Bowen Basin permits for use at its future plant.
“What we’ve got here with Sunshine is an ideal arrangement for us,” Karroll said. “There’s an existing pipeline only 4km from the field, good infrastructure in Gladstone and a strong local market.”
According to Karroll, there has never a better time to invest in the industry. Globally, demand for ammonia, which is used to create a range of products including fertilisers and explosives, is increasing at a rate of 4-5% per annum. But Australia is the standout growth market with its strong agricultural base causing demand to escalate 10% every year.
Olefins
The Western Australian Government says the state has sufficient proven natural gas reserves to support a world-scale olefins-based petrochemical project.
The gas-to-olefins (GTO) process turns natural gas into ethylene and propylene – the high-value building blocks used in making plastics. This method is cheaper and produces far fewer emissions than high-temperature steam or thermal cracking of naphtha – the conventional way to make olefins from crude oil.
Olefins already represent big business for ExxonMobil Chemical, which currently sells more than 14 million tonnes per year. After developing its own GTO technology, the industry giant says it is looking to build more plants around the world.
But Australia will not host one, according to a locally based ExxonMobil spokesperson, even though part of what makes GTO appealing is its potential to use stranded gas in remote fields.
Meanwhile, findings from a WA Department of Industry and Resources technical study has revealed that such a project is indeed feasible and could use natural gas recovered from either the North West Shelf Gas Project, Apache Energy’s Harriet/Varanus Island oil/gas project or Gorgon.
But based on current and forecast demands for domestic and export gas in Western Australia, the department warned it was unlikely enough petrochemical feedstock would be available for an olefins plant based at Dampier until 2012.
