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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.
Other excellent sources of information
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,
....:
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
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) 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.
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. Details
on WA www.methanex.com/corporateinformation/globalfacilities.htm 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.
In April 2006, the world's largest
greenfield ammonia plant, costing US$575 million located at Karratha
in the Burrup was opened in April 2006. It employs about 100 people at full
production with an annual production capacity of 760,000 tonnes of liquid
ammonia. The
plant is owned by Burrup Holdings Pty Ltd. which is 30 percent owned by Yara
with the balance owned by the Oswal and Rambal families. Yara will sell 100 per
cent of production. Yara
added two new 60,000 cubic meter vessels to its shipping capacity in 2004. In June 2001, the Indian Oswal Group (supplies one-sixth of India's urea and
DAP fertilisers) announced it would invest in the world largest ammonia plant
producing 700 000 tonnes per year. It will be located on the Burrup
Peninsula adjoining the NWSJV gas processing facilities. Known as Burrup Fertilisers and costing US$350m (A$700m) it will
require 73tj/day (27petajoules pa) of gas to be supplied by the Harriet joint venture.
Notwithstanding its significant supplier position in the Indian market (a market
which is anticipated to grow 50 per
cent by 2010) it has undertaken a supply agreement with Norks-Hydro to take 100
per cent of its production. In Feb 2002, having received EPA
approval, Burrup said major siteworks could begin in the third quarter of 2002
according to Oswal executive director Vikas Rambal. Around 600 people would be
employed on site at the height of construction and about 60 people full-time
when the plant was operational. When commissioned, the plant will produce 2,200
tonnes of liquid ammonia a day. Construction commenced in April 2003 and is
due for operation late 2005. It will have a production capacity of 760 000
tonnes per annum as one of the world’s largest and will operate for a minimum of
25 years. The Western Australian Government has
provided a A$134 million multiuse infrastructure package to upgrade the Dampier
Port, establish multiuser infrastructure corridors, establish and realign roads,
including Hearson Cove Road, and for inlet and outlet pipes for water
desalination. The Water Corporation also will establish a A$20 million seawater
desalination plant to support the project. Gas for the Burrup Fertilisers project will
be supplied by the Harriet Joint Venture from the Varanus Island production hub.
The Joint Venture comprises the Apache Energy Limited, Kufpec Australia Pty Ltd
and Tap Oil Limited with agreement for the supply of 82 terajoules of natural gas per day
for the plant over 25 years, starting in 2004. Dampier Nitrogen was begun by Plenty River Corporation
who had
promoted a ammonia/urea
project in partnership with Indian Chambal fertiliser company.
It is to be located on the Burrup Peninsula. In September 2000, The North West Shelf Gas and Plenty River announced an MoU for
the supply of 70 Tj/day (500 000 tonnes pa) of gas per year. The US$500m project aimed to
commence in 2004 at 650 000 tpa of ammonia and 800 000 tpa of urea with
one-third or 200 000 tonnes pa of the ammonia for export. See also ammonia. In May 2002, 60 per cent of
the project was
sold by Plenty River to a consortium of Australian and international companies
that have agreed to complete a
feasibility study for a facility to now produce around 1.2 million tonnes of
granular urea annually and about 100,000 tonnes of ammonia making it one of the
largest facilities of its type) in the world. The
consortium is called Dampier Nitrogen, comprises Canadian firm Agrium Inc, Australia's
Plenty River Corp Ltd and Thiess Pty Ltd, and Germany's Krupp Uhde GmbH.
Leighton Holdings subsidiary Thiess and Krupp Uhde are expected to be joint
engineering and construction contractors and Agrium will be the plant operator
and product marketer and will assume 50 per cent of the project with Thiess
taking 10 per cent. Agrium
has significant operating experience in the nitrogen market, Thiess had a strong
track record on major engineering projects and a long association with the
Burrup Peninsula, and Krupp Uhde was a world-class technology provider. Agrium
Inc. is a global producer and marketer of fertiliser and a major retail supplier
of agricultural products in North America and Argentina. Thiess
Pty Ltd is one of Australia's largest engineering firms, also operating in South
East Asia, the Pacific and South America. Krupp
Uhde is a German company in the technologies segment of the Thyssen Krupp group
focused on the design and construction of chemical processing and other
industrial plants. 3. Agrium Australia. Evaluating a A$900 million ammonia and urea plant at the
Burrup West industrial plant. The company plans to produce 1.2million tpa of
urea and 100,000 tpa of ammonia requiring 100Tj/d of natural gas. 4. Deepak Fertilisers Evaluating a 300,000 tpa ammonium nitrate plant
requiring 150,000 tonne of ammonia. Details of technologies In June 2001, a project for the NW to produce DME was announced. The
venturers would be Mitsubishi Gas Chemicals, Itochu, JGC amd Mitsubishi Heavy
Industries. The plant is expected to produce 1.4 to 2.4 million tonnes of DME
per year from a plant expected to cost US$600 million with production beginning
2006.
DME would be produced from methanol and used as aerosol propellant and fuel
as substitute for LPG and diesel. Mitsubishi produces 6000 tonnes of DME per
year at its Japanese plant. It also operates two methanol plants in Venezuela and Saudi Arabia with a combined capacity of 3.6Mtpa. The proposed plant will produce methanol for
conversion into 1.7Mt/a of DME from around 220TJ/d natural
gas. Detailed feasibility studies are underway. A commitment to proceed is
expected in mid-2002. If a go-ahead is given
the plant could be operating in late 2006.
Comment: Does this project have an international comparative
advantage?? Should it not be a spin-off
from a world-scale (2 MTPA) methanol project? The WA government has expectations for a petrochemical venture
costing around A$2bn by year 2003 at the source of NW gas in the
north west either at Hearson Cove on the Burrup Peninsula, or nearer
Karratha at the Maitland Industrial Estate. Some 500 000 tpa of ethane would be
used with salt supplied from Dampier Salt 20 km away. Caustic soda, EDC/VCM and
caustic soda would be produced.
In July 2001, one of the venturers announced its withdrawal.
Details.
See Rare Earths Eaglehawk Kaolin owns a 36Mt deposit of kaolin about 100
km south of Broome which is suitable for manufacture of synthetic zeolites. The
company has patented a process for the zeolites to be applied to the wine
production. Development would cost around A$90 million. Kaolin is also produced
at Greebbushes by Gwalia Consolidated (producing 2000 tonnes in 1999.
Activities guide
The table links to information about chemical-related activities
and those which we consider could be reviewed as to their potential.
Minerals
Links - Australia
Australian
Institute Of Petroleum
Natural resources
Western Australia is well endowed with resources exporting (2000) A$14 billion in minerals and oil and gas. The state
has a population of 1.8m growing at 1.4 per cent p.a.
tantalum 37%
titanium minerals 27%
lithium 19%
alumina 18%
iron ore 12%
LNG gas 9 %
salt 4%
The state has particular expertise in resource development and is a world
leader in many areas. For example, Alcoa has its international research
facilities located in the State and the CSIRO's (the pre-eminent government
research organisation) division of minerals has relocated from Melbourne.
There are many international-class research facilities and co-operative
research centres while the Kwinana industrial region could be described as
the only not contracting chemical industry cluster in Australia.Energy
Gas
Coal
Investment projects
North West
Synthetic hydrocarbons
1. Gas to liquids
Gas to liquids report
Methanol
Northern Territory
Shell (withdrawn)
Syntroleum (withdrawn)
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
Sasol Chevron (withdrawn)
Aromatics
project (deferred).
Methanol projects
Methanex (withdrawn)
Corporate web site: www.methanex.com.
GTL
Resources (withdrawn
Coogee Chemicals
owns and operates methanol
technology and owns a suitable gas field.
Ammonia/Urea projects
1. Burrup Fertilisers - ammonia project
The company has entered into a take-or-pay agreement for the take-up of natural
gas from the Harriet JV over the 25-year life of the plant.
Burrup Fertilisers have entered into an off take arrangement with Norsk Hydro for
100 per cent purchase of all ammonia produced. Norsk Hydro is Norway’s largest
energy company and the world’s largest trader and shipper of ammonia. In 2005,
Yarra International, a Norwegian fertiliser company purchased a 30 per cent
shareholding.2. Dampier Nitrogen (abandoned)
Dimethyl Ether (DME) (abandoned)
1. Chloralkali
See also extract report
Rare Earths
Zeolites (see also aluminium
chemicals)
Magnesium hydroxide/oxide
Regional guide
Chemlink Pty Ltd ABN 71 007 034 022. Publications 1997.
All contents Copyright © 1997. All rights reserved. Information in
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