The proponents - CSBP & Farmers Ltd (CSBP), and Norsk Hydro a.s (Norsk Hydro) of Norway - intend to establish a S450 million facility in the Kwinana industrial area that will use natural gas to manufacture 500,000 t/a of ammonia, and approximately half the ammonia produced to manufacture 430,000 t/a of urea, subject to overall feasibility of the project.
Ammonia is used in the production of nitrogenous fertilisers including urea, a concentrated nitrogenous fertiliser that is used extensively by Western Australian farmers. While ammonia is already produced in the State, all urea is sourced from overseas, leaving farmers totally dependent on imports. The ammonia/urea project will link production of the two products, in what will be the first ammonia/urea plant of its size in Australia and one of the largest in the world.
In 1984, international authorities predicted an impending global shortage of ammonia and estimated that an additional thirty to forty world-scale plants would be required by the year 2000. It was logical to investigate the feasibility of building such a plant in Western Australia, because of the ready rural market for nitrogenous fertilisers. In addition, ammonia production uses natural gas as a raw material, and the Western Australian Government is actively encouraging the development of major industries to consume surplus gas from the North-West Shelf project. CSBP responded to the challenge and was joined by Norsk Hydro in 1985 to study in detail the feasibility of establishing a world-scale ammonia/urea plant in the State.
CSBP and Norsk Hydro submitted a comprehensive proposal to the Western Australian Government in August 1985. Following assessment of this and competing proposals in March 1986, the Government selected CSBP and Norsk Hydro to proceed with a full feasibility study, including negotiation of gas supply with the State Energy Commission of Western Australia. The proponents submitted a Notice of Intent, outlining the environmental considerations associated with the proposal, to the Environmental Protection Authority (EPA) in April 1986. The EPA advised that the preparation of an Environmental Review and Management Programme (ERMP) would be necessary.
Due to the need for Commonwealth export licences for the products, the Australian Department of Arts, Heritage and Environment also required that a draft Environmental Impact Statement (EIS) be prepared. This ERMP/draft EIS meets the requirements of both authorities. After a public review of the document, the proponents will be required to respond to submissions received, and these responses, together with the ERMP/draft EIS document and submissions, will be taken into consideration during the assessment of the project by the EPA and the Department of Arts, Heritage and Environment.
Of the total plant production, approximately 150,000 t/a of ammonia and 330,000 t/a of urea will be exported, directing revenue into the State. Some 100,000 t/a each of urea and ammonia will be supplied to the local market, thus reducing current import expenditure.