Photo by: NeuRizer
Name of the Project
NeuRizer urea project (NRUP).
Location
South Australia.
Project Owner/s
NeuRizer.
Project Description
NRUP is carbon neutral by design and will deliver low-cost, high-quality nitrogen-based fertiliser, ensuring a secure supply for local and export agriculture markets.
The facility will initially produce one-million tonnes a year of urea fertiliser, with the potential to increase to two-million tonnes a year.
The project is the first fully integrated urea production facility in the world, leveraging an innovative configuration for in situ synthesis gas production, gas processing, ammonia and urea manufacturing and carbon geosequestration.
Potential Job Creation
NRUP will be one of the biggest infrastructure projects of its type in Australia, providing long-term economic development and (employment opportunities of) about 2 250 jobs during construction, as well as more than 1 200 ongoing jobs for the communities of the Upper Spencer Gulf region, northern Flinders Ranges and South Australia.
Capital Expenditure
Not stated.
Planned Start/End Date
First operations are expected in 2025.
Latest Developments
NeuRizer has signed a binding, long-term take-or-pay offtake agreement with petrochemicals company Daelim subsidiary DL Trading for 500 000 t/y of granular urea fertiliser at an index-linked price.
The agreement has brought NRUP closer to production by ensuring the future revenue required for project financing.
Under the A$1.5-billion agreement, 50% of the initial yearly production target has been contracted to DL Trading for the first five years of operation, with the option to extend by mutual agreement.
NeuRizer and DL Trading entered into a heads of agreement for the offtake in November 2021. The finalisation of the agreement further extends the relationship between NeuRizer and Daelim, whose subsidiary DL E&C was awarded the engineering, procurement, construction and commissioning (EPCC) contract for the project in June 2021.
The take-or-pay offtake agreement came shortly after it was announced that a private share placement agreement would result in DL E&C’s taking a 9.1% stake in NeuRizer.
NeuRizer has said that the offtake agreement is likely to be the only offtake agreement required to secure debt funding for the construction of the NRUP, as it is sufficient to cover all costs including finance. Nonetheless, NeuRizer is not prevented from entering into further offtake agreements with other parties, should it be deemed appropriate.
“A further 50% uncontracted urea supply allows us to remain agile to support domestic demand and take advantage of market pricing,” NeuRizer MD Phil Staveley has said.
The agreement with DL Trading will be focused on only the export market and will be premised on an agreed pricing mechanism based on index-linked pricing.
Moreover, the contract value of A$1.5-billion is based on forecast CRU prices. At current prices, it will be worth more than A$2.8-billion.
The agreement is predicated on several conditions that mostly relate to the successful production of urea at NRUP.
Firstly commercial production – 30 consecutive days of continuous production at a rate of 2 650 t/d – needs to occur, with a taking-over certificate issued by NeuRizer to DL E&C under the EPCC contract.
Secondly, NeuRizer must secure all necessary infrastructure and facilities to allow for the shipment of at least 84 000 t a month of product.
Thirdly, if the NeuRizer board’s final investment decision is not to proceed with the project, then the agreement will be terminated.
Key Contracts, Suppliers and Consultants
KBR (ammonia technology contract).
Contact Details for Project Information
NeuRizer, tel +61 8 8132 9100 or email contactus@neurizer.com.au.