Australia will soon receive a critically-needed supply of AdBlue solution from Indonesia, according to an Australian Broadcasting Corp. (ABC) report last weekend.
Australia’s federal government is also approaching Middle East countries, such as Saudi Arabia and Qatar, for supplies, according to the report, amid a domestic supply crunch that is threatening to bring the country’s transport industry to a halt (GM Dec. 10, p. 29). Supplies are being airlifted in, such is “the frantic need to secure supplies,” according to a report by the country’s Daily Mail.
Australia’s transport sector is heavily reliant on diesel trucks, which use AdBlue as an additive to reduce levels of nitrogen oxides (NOx) pollution from the diesel engines.
Trade Minister Dan Tehan told ABC there are now around seven weeks of supply left, up over the five weeks’ supply reported late last week, following negotiations with international trading partners.
According to the report, the minister “is confident” that enough product could be supplied in the coming weeks, but he has urged Australian businesses not to stockpile AdBlue in the meantime.
But according to the Daily Mail report, AUSblue, which manufactures half of Australia’s AdBlue, said unless it can source enough product from overseas, there could be major supply chain delays by January.
China typically supplies around 80 percent of the diesel-grade urea Australia uses to make AdBlue solution, but supply has dried up since China imposed restrictions on its urea exports. The AdBlue marketed in Australia contains some 32 percent urea and 68 percent de-ionised water.
Domestic urea manufacturer Incitec Pivot Ltd. (IPL) late last week said it was looking at ways it can increase manufacturing capacity of the urea used to make AdBlue solution over the next few months. It said it currently supplies around 10 percent of the country’s market for AdBlue solution, and is the only Australian manufacturer to make the solution from urea melt.
IPL produces urea at its Gibson Island plant in Brisbane, but currently “only a very small proportion” of the urea produced there is used to make AdBlue. The plant is set to close at the end of next year (GM Nov. 12, p. 1).
Australia’s current urea supply shortages for making AdBlue have boosted prospects for urea projects under development in the country.
Phillip Staveley, Managing Director of Adelaide-based Leigh Creek Energy, which is developing the Leigh Creek Energy Project (LCEP) in South Australia, told Australia’s Stock & Land the project had been mapped out well before this year’s rapid rise in global fertilizer prices and Australia’s current difficulties with getting urea into the country, but said both factors further strengthened the business case.
The Australian company plans to establish a 1 million mt/y urea facility utilizing in-situ gasification (ISG) at LCEP, located some 550 kilometres north of Adelaide and overlaying the Leigh Creek coalfield (GM Jan. 22, p. 1). Early this month, it inked a Heads of Agreement (HOA) with South Korea’s Daelim Ltd. for an offtake of a minimum of 500,000 mt of granular urea to be produced at LCEP for a minimum of five years (GM Dec. 3, p. 33).
Thebarton, South Australia-based Strike Energy Ltd., whose Project Haber is under development adjacent to Geraldton Port in Western Australia (GM Jan. 15, p. 1), this week secured the award of a A$2 million (approximately US$1.43 million at current exchange rates) matched grant as part of the Australian Federal Government’s Supply Chain Resilience Initiative for Port Haber and also the award of Lead Agency Status by the Western Australia Government, in recognition of the project in terms of generating a material domestic urea manufacturing capability, the company said.
Port Haber includes the development of a 1.4 million mt/y urea plant and an 800,000 mt/y ammonia plant.