PERTH (miningweekly.com) – ASX-listed Strike Energy has selected US-based Koch Industries as the preferred bidder for the 1.4 million tonnes a year of granulated urea to be produced from Strike’s proposed Project Haber fertiliser development, in Western Australia.
The preferred bidder status was awarded after a competitive offtake process, Strike said on Thursday.
Strike and Koch have entered into a non-binding term sheet and will now enter into the drafting and negotiation of a full form definitive offtake agreement reflective of key terms agreed in the term sheet, which include a 10- to 15-year supply period, pricing linked to international benchmarks and a condition precedent relating to Project Haber’s final investment decision.
“This award creates the foundations for an exciting and transformational period for the company, at the conclusion of which Strike will have completed its journey to becoming a fully vertically integrated manufacturer of high energy intensive and low carbon emission products,” Strike MD and CEO Stuart Nicholls said.
“Securing Koch Fertilizer as Strike’s sole offtaker would give Project Haber a high degree of creditworthiness and financial security. Having a single long-term offtaker for 100% of the urea production will provide the foundation for the financial architecture required to successfully finance this nationally significant development.”
“Australia’s farmers are set to benefit from the re-domestication of Australian urea manufacturing, which will secure a local supply of globally cost-competitive, low carbon emission nitrogen-based fertiliser. With global urea prices at all-time highs, the timing for this development in Australia is now.”
Through the integration of Strike’s adjacent low impurity natural gas, application of ammonia technology, domestication of fertiliser supply and incorporation of green hydrogen, Strike is aiming to develop a low carbon urea product to support the abatement of Australia’s agricultural emissions.
Strike told shareholders that Project Haber’s urea will support Australia’s farmers by improving the availability of nitrogen-based fertiliser and removing expensive supply chain costs ultimately delivering low-cost and low carbon fertiliser product to farms across the country.