Striking while the iron is hot: $3b Geraldton urea project aims to cash in on domestic fertiliser shortage

Strike Energy says its $3 billion urea project is progressing at “great speed” after it received official backing from State and Federal governments amid a global shortage of the fertiliser-making product.

Project Haber – earmarked for the Narngulu industrial estate 10km outside Geraldton’s CBD – has been awarded Lead Agency Status by the WA Government and handed a $2 million grant through the Federal Government’s Supply Chain Resilience Initiative.

Lead Agency Status helps fast track projects through approval processes that can delay major developments.

Strike managing director chief Stuart Nicholls said Project Haber aimed to address a national shortage of urea – one of the main ingredients in fertiliser.

Mr Nicholls said Australia’s domestic supply of urea would take a huge hit when one of the nation’s largest fertiliser plants – Incitec Pivot’s Gibson Island facility – ceases production in December after 50 years of operation.

He said Project Haber, which is scheduled to come online in 2025, would address the shortfall and reduce the price of fertiliser for local farmers.

“It will be hugely impactful for Western Australian farmers, particularly those in the broad acre sector, which is a backbone of the State,” he said.

“Urea can make up to 60-70 per cent of the total input of broad acre grain farming.

“Using high-quality gas and green hydrogen we will create some of the lowest carbon and most affordable fertiliser that Australia has ever seen.”

Project Haber is expected to produce 1.4 million tonnes of urea each year in a major windfall for the Mid West economy.

Strike put out expressions of interest for customers eight months ago, with nearly 15 prospective buyers keen to get involved.

Mr Nicholls said there was plenty of demand for locally made fertiliser and Strike hoped to source full financial backing by the end of the year, starting construction in early 2023.

He said the multi-billion dollar project would create 1200 jobs during construction and 300 full time jobs in Geraldton over the 30 year life of the plant.

Project Haber is relying on the success of Strike’s South Erregulla gas field, southeast of Dongara, which will pump gas 120km north to be turned into ammonia and urea in Narngulu.

For Australian farmers, more affordable fertiliser cannot come quickly enough after the price of the commodity rose sharply in 2021.

Commodity market analyst Andrew Whitelaw said the urea spot price jumped from around $400 a tonne to $1400 a tonne over the 12 months to December.

“Fertiliser is essentially just energy,” he explained.

“What we are seeing at the moment is, globally, energy prices are high.

“The building blocks of fertiliser are expensive, which puts the price up.”

However, Mr Whitelaw predicted prices would not keep rising forever, expecting it to be a short-term increase.

“I don’t see it lasting years and years,” he said.

“We’ve had prices before like this in 2007 and 1973, both caused by high energy costs.

“Each of those times we were told this would last forever.”