The fortunes and future of ammonia and the State’s domestic gas policy intersected during a panel discussion at the Energy Club WA's July Industry Dinner.

Yara Pilbara General Manager Laurent Trost; Wesfarmers Chemicals, Energy and Fertilisers General Manager Climate Opportunities Mussaret Nagree; Mitsui Vice President Development Joe Ariyaratnam; and Chair of Parliament’s Economics and Industry Standing Committee, Peter Tinley discussed a range of issues including increased production, the future of hydrogen and green and blue ammonia, and the long-term availability of gas supplies.

Mr Trost said that Yara Pilbara Fertilisers plant - one of the largest ammonia production sites in the world – would fail and have to close without access to long-term gas.

“We are at the edge of not being competitive,” Mr Trost said.

He was responding to a question from a Strike Energy representative, who said investment in the Perth Basin – one of the cheapest sources of energy – was being stifled.

Strike Energy wants the State Government to overturn its ban on onshore gas being available for export to make onshore development more attractive.

The Economics and Industry Standing Committee is investigating the existing Domestic Gas Policy, with its interim report
saying it was no longer “fit for purpose” and raising the prospect of State intervention.

The final report is due to be released in August.

Mr Tinley had earlier said that the State needs more gas and noted that since the release of the interim report
“we've seen a response from industry”.

“Industry has understood that there is a role to play to make sure they're meeting their obligations under the under
the arrangements,” he said.

Mr Tinley rejected the suggestion development of the Perth Basin was being stifled.

“The issue is not about the Perth Basin. The issue is onshore gas and gas that is shipped on shore and comes into
the purview of the Domestic Gas Policy,” he said. “On any measurement, the Domestic Gas Policy is not fit for the future.

“When we talk about LNG, if we produce more LNG and that comes on shore, that means more domestic supply.

“We need to talk about the concept of the total take for future Western Australians. One thing that will bring down a government fast is people not
having a job, not having the dignity of work or the capacity to meet the cost of living.

“To answer your question more directly around stifling investment in the Perth Basin, I don't think we are because if it is not used by the proponents on
those leases now then somebody else will use it.

“It will eventually find its way to the domestic market. I'm not saying that it couldn't export onshore gas, but there is a total question here about what we
want for the State. It's a question for the community. What are we prepared to sacrifice to ensure that the jobs of two and three generations from now
and the responsibility to the global supply chain is met?”

He said the State had to move from “an extraction jurisdiction” to a production-based model, particularly in relation to critical minerals and downstream sequestration.

Earlier Ms Nagree said green ammonia is the "holy grail of decarbonisation” but it needs a lot of electricity.

“As great as green hydrogen and ammonia are and as much as we'd love to see those deployed at scale it really is challenging from a renewable
asset requirement and also the cost of electricity,” she said.

“Which brings us to blue hydrogen and blue ammonia. We can add carbon capture and storage to the current ammonia process and decarbonise
a large portion of the emissions that come from that process.

“It's entirely feasible that we can have large scale CCS hubs operating within 10 years.”

Mr Trost said Yara was developing green pilot plants, but the ammonia produced would easily cost five times more than the current ammonia price.

“The scalability of developing green ammonia is not yet there because the price of green electricity will be too expensive,” he said.

It would be 10 to 15 years before large-scale green ammonia production was possible in the Pilbara.

Yara was working on a blue ammonia solution.

“That's partial blue because we still have 25 per cent of our CO2 emission that will come from the energy generation that we have on site. That's very difficult
to abate and very costly to abate. 

“But 75 per cent of decarbonisation from the pure CO2 stream is possible and we expect, working with the Santos or with the Angel (CCS) Joints Venture to
have this readily available by 2029 or 2030. 

“This is tomorrow already. The solution is there. We know the high-quality of reservoirs there. The technology is existing, we still need to work on the policies and the financing.

“For this we need some guarantees and so one of the discussions we will have is the availability and affordability of of gas.”

He said there was still uncertainty around the market’s willingness to pay for blue or green products in the future.

“How can a farmer in Vietnam or Nigeria pay double or triple the price of fertilizer? He won't be capable to pay that, so we have to take into consideration
all this for the future but at least we know the solution for decarbonised ammonia with blue is possible and we expect to have this ready by 2030 late latest.”

Mr Ariyaratnam said Mitsui was involved in trials using ammonia to co-fire coal-fired power station.

Results using 20 per cent ammonia have been positive, with the next step being 50 per cent and the aim of 100 per cent for electricity generation.

“I don't think it's well understood that even today coal is still responsible for about a third of the supply mix for electricity generation in Japan and even in
the latest outlooks out to 2030 coal still makes up about 20 per cent of the supplied for electricity generation,” he said.

“So being able to successfully scale up co-firing will have a material impact on reducing emissions globally.

“In addition to using ammonia in thermal power generation, we also see it as a very efficient carrier of hydrogen.”

Thank you to our July Industry Dinner event sponsors Wood, TBH and Pilot Energy. 

You can find the event photo's here. 

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