Start-up Australian urea producer Perdaman Chemicals and Fertilisers announced Oct. 13 that it has signed an offtake agreement with Incitec Pivot Ltd. (IPL) for the entire output of granular urea from its proposed Collie Urea Plant. The deal covers the purchase of 2 million mt/y for 20 years.
The $3.5 billion Collie project in Western Australia is slated to start production in 2014. It will be Australia’s first coal gasification plant, turning Collie-area coal into urea.
Perdaman Chairman and Managing Director Vikas Rambal said the signing represents a major step forward for the plant’s development.
“The Collie Urea Plant has the potential to make Australia a major player in the global urea market,” said Rambal. “The agreement means that the nation can become a major exporter of urea. This will benefit Australia’s balance of trade figures. There will also be opportunities for sales of urea within Western Australia.”
James Whiteside, IPL general manager, supply chain and trading, said the company will sell the urea in several markets, including Oceania, India, Pakistan, Asia, and the Americas. The target markets represent 16 million mt out of a total global urea trade of 35 million mt.
One independent observer said the offtake news significantly ratchets up the Collie project’s credibility.
Perdaman says the company is on track to begin plant construction in the first half of 2011. It is expected to generate between 1,200-1,500 construction jobs and 200 operational jobs once production begins.
Perdaman Industries and its subsidiary, Perdaman Chemicals and Fertilisers, were formed in 2006. Rambal and his fellow directors have major project experience, most recently involvement in the development and construction of the A$700 million Burrup ammonia project in Western Australia.