Resources Development Minister Colin Barnett has congratulated Wesfarmers CSBP for its initiative in building a state-of-the-art ammonia plant at Kwinana.
Mr Barnett unveiled a plaque today to officially launch the $150 million facility.
He said it was the biggest single project to be developed on the Kwinana industrial strip for at least a decade.
“Not only is it a significant new downstream processing project for Western Australia, it has the potential to eliminate the need to import ammonia into the State, effectively improving WA’s balance of trade by about $35 million per year,” the Minister said.
“Until the plant’s commissioning earlier this year, Wesfarmers CSBP imported more than 100,000 tonnes of liquid ammonia annually, mainly from the Middle East, to supplement production from an ageing existing plant.
“By increasing its local capacity to produce ammonia, Wesfarmers CSBP will be able to buffer itself against the volatility of international ammonia prices which in recent years have varied from $US60 to US$310 per tonne. The current price is around US$225 or around A$350 per tonne.
“Ammonia is a key raw material for the manufacture of ammonium nitrate which, in turn, is used for making explosives for the mining industry. Ammonia is also used for the production of sodium cyanide, an essential reagent for gold extraction and nickel refining.
“New-generation nickel mines at Murrin Murrin, Cawse and Bulong are all taking liquid ammonia from CSBP and the demand appears to be increasing.”
Mr Barnett said the newly-commissioned ammonia plant was capable of producing 650 tonnes of ammonia per day or 220,000 tonnes per year - more than double the capacity of a 30-year-old plant it replaced.
Up to 450 people were directly employed during the project’s construction phase, providing a much-needed boost at what was a quiet time for new projects within the resources sector.
“The number of permanent employees required to operate the replacement plant is not expected to increase,” Mr Barnett said.
“However, the increased skills required to operate the plant will directly contribute to the local skills pool.
“The state-of-the-art technology used in the plant will have a positive effect on the environment.
“This will come as a result of reduced energy consumption per tonne of ammonia produced, leading to cleaner operations.
“Natural gas consumption from the new plant will be about two-thirds that of the old plant per tonne of ammonia produced.
“The plant is essentially self-sufficient with respect to steam and electricity requirements due to its sophisticated heat-recovery system.”
Mr Barnett told about 300 guests at today’s launch of the new ammonia plant at Kwinana that WA was on the threshold of more exciting downstream processing industries in the North-West of the State.
He was referring to last month’s signing of Letters of Intent from two Japanese energy utilities to take additional liquefied natural gas from the North West Shelf project, a decision which will pave the way for the $2.2 billion development of a fourth LNG train on the Burrup Peninsula.
Also on the horizon were three major petrochemical projects in the same area: Syntroleum Corporation’s $600 million gas-to-liquids plant and Plenty River’s proposed ammonia urea plant costing $800 million, plus proposals by Dow/Shell for a multi-product petrochemical plant costing an estimated $3 billion.
Media contact: Diana Callander 9222 9699