Strike Energy Ltd., Perth, has been awarded a grant of $2 million (Aus.) by the Australian government for its proposed Project Haber urea manufacturing development in the North Perth basin of Western Australia.
The grant has been awarded as part of the federal government’s Supply Chain Resilience Initiative. Project Haber has also received Lead Agency Status from the Western Australian state government.
The project is expected to be further supported by the WA government’s announcement of Hydrogen Hub status for the state’s Midwest that could see public investment of around $117 million (Aus.) in the region, matched by a similar amount from the federal government.
The significance of the project has been recognized at a time of global shortage of urea where, due to the northern hemisphere energy crisis, gas feedstock has been diverted from industrial to primary uses like power and heating. Urea exporting nations have imposed restrictions on exports pushing the price of urea upwards of US$1,000/tonne on the spot market.
Australia is facing a zero domestic urea production by end 2022 with Incitec Pivot Ltd. recently announcing the close of its Gibson Island production plant in Brisbane.
Project Haber is contingent on certain outcomes, including the proving up of sufficient gas reserves at South Erregulla prospect in the North Perth basin as well as satisfactory results of front-end engineering studies, access to finance, securing binding urea offtake agreements and obtaining all necessary permits, approvals, and authorizations.
Strike’s immediate program calls for drilling the high-impact well South Erregulla-1 where the company has 100% interest. Spudding is expected before yearend.
The objective of this and any subsequent appraisal wells is to delineate around 350 petajoules of gas resource to secure sufficient gas requirements for Project Haber from the company’s 100%-owned permits. This amount of feedstock would enable Strike to progress the banking and equity processes with enough gas to cover the proposed tenor of any debt facilities.
Pre-FEED studies for the project were completed earlier this year. Strike is progressing early FEED work focused primarily on environmental approvals and consolidating the basis of design.
The company also has begun the FEED/engineering, procurement, and construction (FEED/EPC) tender process intending to award the FEED scope upon drilling success at South Erregulla-1.
When constructed, Project Haber would be one of the country’s largest hydrogen-consuming plants via its urea manufacturing process and hence has potential to play a strategic role in the local hydrogen economy, the company said.