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 | Investment projects |
| Details by region |
| Oil and gas in WA |
| Iron in WA |
| Described by region. |
| Chemical industry performance |
| Insights from leaders (CIP) |
| Kwinana industrial belt 30 km south of Perth. It was seeded by the BP Oil refinery in the 1950's and now has a nickel refinery, a superphosphate fertiliser and ammonium nitrate producer, a titanium dioxide pigment plant, a sodium cyanide plant, an alumina refinery and smaller industry. It is well served with rail, road and sea transport. |
| Kemerton industrial park some 150 km south near the regional town of Bunbury with a titanium dioxide manufacturer and a silicon smelter. In the Vasse region there is potential for gas exploitation and is near major titanium mineral deposits. |
| Kalgoorlie has gold and nickel activities. |
| Port Hedland with a Direct Reduced Iron (DRI) project by BHP, electrolytic grade of manganese dioxide and vanadium pentoxide. |
| Geraldton with a synthetic rutile plant and a potential DRI project. |
| See also national chemical
industry
and trade performance.
A state by state comparison (five digit resolution available on request) .
|
With its extensive mineral and oil and gas reserves, Western Australia has the fundamentals to become the largest commodity chemical manufacturing state in Australia (even more so if aluminium oxide ie. alumina is included [as is already titanium dioxide pigment]).
The state is gas-rich supplying about 10 per cent of world LNG. Ethane is available in increasing amounts from domestic gas and the state is one of the largest importers of caustic soda (at some 700 000 tpa) which could help support a chloralkali venture in the north of the state. Much of the potential ethane production in the north west is presently bound up in exports of LNG with contracts precluding its extraction (though few if any projects around the world extract ethane from LNG). Expansion of domestic gas use from around 550 terajoules per day to 1100 terajoules by year 2000 provides the basis for adequate ethane.
See also gas in WA.
Other new ventures in the north west could include ammonia, methanol and polyethylene.
| A Direct Reduced Iron project has already begun in the state with another under consideration. |
| In April 2002, Rio Tinto Confirmed the construction of the HiSmelt project at Kwinana. |
Other excellent sources of information
| Minerals Links - Australia |
| Australian Institute Of Petroleum |
Broadly the economy is divided into services (57%), mining (17%), manufacturing (13%), construction (10%) and agriculture (4%). The state produces, as per cent of world production, ....:
| tantalum 37% |
| titanium minerals 27% |
| lithium 19% |
| alumina 18% |
| iron ore 12% |
| LNG gas 9 % |
| salt 4% |
The West Australian government has assisted with the provision of general purpose infrastructure to industry including the upgrading of railway lines, the provision of roads, identification of opportunities and other measures to facilitate investment. As a general principle, investments may be supported to the net benefit of the project to the State (see also government assistance - nb. failure rate!!).
Gas in WA press for details
Australia produces 9 per cent of the world production of LNG gas of 82 million tonnes. By year 2005, Western Australia could be producing one-quarter. World wide there are 8 producers of LNG which is the fastest growing energy sector.
View of the Burrup Peninsula gas processing plant
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See also the Northern Territory. |
Pipeline related costs increase the cost of gas in the Kwinana region by A$1 per gigajoule.See Pipeline section.
For some products backloading rates (imbalance of interstate freight movement reflected in freight differences) enables West Australian companies to competitively supply regional markets in eastern Australia.
The state has a coal deposit south of Perth atCollie being exploited with exploitable reserves of 600 Million tonnes. The coal has a high moisture content (25 per cent), with a low energy content of 20Mj/kg and is prone to spontaneous combustion. However it has a low ash content (5 per cent) and is particularly reactive and valuable for use in rutile reduction (Becher process). A process is being establish to briquette the coal to enable its safe transport and reduce the moisture content.
There are substantial deposits of lignite (billions of tonnes) in the Esperance region in the extreme south of the state. A prefeasibility study (March 2000) by Texaco has shown it can produce diesel (and gas) on competitive terms even at oil prices down to US$12 per bbl. The partners are Texaco (that owns the technology) and Australian Power and Energy and are considering a A$1 billion project to produce 12 500 bbls of diesel per day (State consumes around 8 000 bbls per day). See also Syntroleum project. A Goldfields railway passes through the lignite deposits.
The Burrup Peninsula (graphic from the West Australian)
| Gas to liquids report |
| Methanol |
| Northern Territory |
Shell has developed GTL technology at Bintalu in the Malaysian state of Sarawak. In May 2002, Shell announced that while it included Australia as one of five sites being investigated worldwide to commercialise its process, it had now ranked it third or fourth after Qatar.
In February 2000, US-based Syntroleum Corporation announced a 10,000 barrel per day (500 000 tonnes per year; requiring 130 terajoules/day or 800 000 tonne per year of gas) natural gas-to-liquids plant that will produce synthetic specialty hydrocarbons (polyalphaolefins - lubricating oils), naphtha, normal paraffins and drilling fluids. It will be owned by a subsidiary called Syntroleum Sweetwater in which Enron Corporation and at one time, Methanex Corporation were equity participants, and will be located approximately 4 kilometres from the North West Shelf Joint Venture LNG Plant. In May 2000, Methanex announced it would withdraw from the partnership with Syntroleum citing inability to agree on terms. (Note their interest in the Northern Territory).
Note that Canadian Methanex is the world's largest producer of methanol supplying 40 million tonnes per year. It once expressed interest in a methanol project for the Northern Territory. Since then this has been abandoned in favour of WA.
It will cost A$600 (US$400-plus) million and employ 200 permanent related jobs. Syntroleum estimates the plant will generate revenues of approximately A$7.4 billion (US$4.7 billion) over 20 years (say A$350 million per year) at constant prices.
Syntroleum Corporation licenses its proprietary process for converting natural gas into synthetic crude oil and transportation fuels. The process is designed for application in plant sizes ranging from 2,000 barrels per day to more than 100,000 barrels per day (note the WA plant is one-tenth of largest scale technology). Current licensees include ARCO, Enron, Kerr-McGee, Marathon, Texaco, Repsol-YPF and now the Commonwealth of Australia. The company has advised that it is "working on development plans" for gas-to-liquids specialty chemicals plant and is working with DaimlerChrysler to develop super-clean synthetic transportation fuels.
The project is helped by A$100 million funding.
| The Western Australian State Government will provide A$30 million in a general infrastructure package including roadways and a desalinisation plant (to provide the cooling water). |
| The Commonwealth Government has acquired a license for A$30 million plus lending the company A$40 million 25 year loan to support R&D in Australia. Under the terms of the $40 million, Syntroleum has agreed to work with approved Australian Universities and research institutions towards advancing GTL technologies. This arrangement provides a reduced royalty structure for this technology and is therefore a sophisticated form of assistance tied to success. |
| Also see the potential shale to oil project in Queensland. |
| More information about Syntroleum under GTL |
November 2001. Syntroleum announced that it had signed an option with the State of Western Australia to lease a 180-acre site for the project. Syntroleum also announced that it had finalised an agreement with the Water Corporation of WA for the 20-year agreement for the supply of water to the project for desalination and cooling purposes.
Syntroleum has since withdrawn late 2002 and expected to relinquish its land on the Burrup.
Sasol Chevron is expressing interest in a 30 000 to 45 000 bbl/day plant planned for expansion to 90 000 bbl/d and ultimately 200 000 bbl/day within ten years. For that target to be achieved, it would require access to 20 tcf of gas using as much gas as the NWS Shelf partners use in three trains on the Burrup Peninsula.
Note: Shell has declared its intention to invest US$6 billion in gas to liquids technologies over 10 years with four plants. It announced in October 2000, agreement with the Egyptian government for a 75 000 bbl per day (3.8 million tpa) facility and a similar plant for Trinidad & Tobago. Shell operates a 12 000 barrel per day (570 000 tonnes per year) GTL in Bintulu in Malaysia. (The Syntroleum Project proposed for WA is 10 000 bbl/day.)
Projects to produce mixed xylenes at the Pilbara, and in South East Asia, has been abandoned by Woodside Petroleum. The economic crisis in Asia resulted in plans for joint ventures with Asian partners failing. The units were due to have capacities of 350,000 tonne pa each.
According to Societe Generale, Australia is the lowest cost location for the production of methanol. There have been two investors.
Methanex had until late 2001 been planning a
project in the NT. On
1 November 2001 Methanex
plans to
construct a A$2bn project with state and federal government assistance (the
State Government announced funding of $136 million worth of multi-use
infrastructure and a Commonwealth investment incentive of $85 million (10
per of project cost) to produce two million tonnes of methanol. Construction
would start in 2003, subject to a final investment decision in late 2002 .
This agreement was in the form of a detailed Memorandum of Understanding with the North West Shelf gas participants, which was converted into a gas sales agreement in mid December. Under the agreement gas (108 TJ/day for stage 1) would be provided by the NW Shelf partners for over 25 years, from 2005, with the contract costing Methanex about $2 billion over the life of the contract.
Methanex is planning, in the first phase of the project, to build the world's largest methanol plant with a capacity of about 2 million tonnes of methanol per year to supply its customers in the Asia Pacific region. This phase of the project will employ more than 1000 people during construction, about 150 people when it is operational and will generate export revenues of about $1.2 billion per annum in export earnings. Subject to the opening of new markets and contracts, a second $1billion expansion of the project could start in 2008 .
In March 2003, the company announced it had deferred the project seeking more government assistance to overcome labour and related costs. It had been offered A$85 million in addition to A$134million in common user infrastructure assistance.
In June 2003, the company announced it has signed an agreement with the NWS gas venturers to supply natural gas at a base rate of 100 terajoules a day (tj/d) for 20 years for the company's planned methanol production facility.
In September 2003, the
company formally announced it was withdrawing from any investment in Australia.
Comment. Methanol is a portable source of energy. Some 34 per cent of the input gas (energy) is lost in its synthesis so its production away from markets requires very cheap gas to be viable. Transport costs impact heavily on its viability and hence its :deferment comes as no surprise. More details on methanol.
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Details on WA www.methanex.com/corporateinformation/globalfacilities.htm |
| Corporate web site: www.methanex.com. |
London based GTL Resources proposes to develop a 1 million tonnes per annum (3000 tonne per day) methanol plant on the Burrup Peninsula. It has been allocated 35 ha of land for the project next to the Woodside Petroleum LPG facility. It is seeking a 15 year loan for US$275 million plus $US25 million for a cost overrun facility for the US$385million project.
GTL have signed a MOU with Apache/Santos/Globex for the sale and purchase of 37 petajoules of gas per gas for a 15-year period and for 10 years with Swiss-based Vitol to supply its product to Asia.
It will use Lurgi Technology who has commissioned a 900 000 tonne per year methanol facility in Trinidad.
The company aims to be in production by 2004.
In March 2002, funding for 70 per cent of the development cost by three banks was announced. The state government will provide A$135 million (20 per cent of the project cost) for "infrastructure assistance". Federal government assistance for A$85million being sought for piping gas and water to the site. The company has left room for expansion to occupy one-half of their 35 hectare site.
In October 2003, the federal government has offered A$35.4million of which $8 million will be applied by the WA government for common user infrastructure (roads and sewerage) while the balance will be applied to GTL to build a desalination plant and upgrade electricity supplies.
The GTL project was confirmed March 2003.
Ammonia is expensive to transport and having considered investment in the north of the state, in May 2000, Wesfarmers CSBP commissioned a A$150m 214 000 tpa ammonia plant at Kwinana Western Australia (to replace their small 30 year-old production facility). With evaluations by Wesfarmers and Incitec, there have been expressions of interest in investing in ammonia/urea plants for export (ie. limited access to the Australian market against established producers). Two companies with Indian interests, are presently interested.
