Out-Law News 1 min. read
23 Dec 2021, 6:09 am
The South Australia (SA) state government and Swiss commodities trading group Trafigura will invest in the construction of a 440 megawatts (MW) hydrogen plant.
The proposed project, planned to be integrated with the Nyrstar smelter at Port Pirie, is expected to cost A$750 million (US$536m). The SA government and Trafigura have each committed A$2.5m to a front end engineering design (FEED) study, according to a statement by the SA state government.
Hydrogen expert George Varma of Pinsent Masons said: “This is another great development for South Australia. The dual functionality of incorporating hydrogen into industrial application demonstrates the way in which hydrogen can be utilised to decarbonise industry, as well as being a tradable export commodity. It is these types of projects which will assist companies and countries to transition to a net zero future and embrace energy transition”
The final investment decision will be made by the end of 2022. Once approved, construction will start in 2023, said Trafigura.
There are two stages to the planned project. The first stage would involve the construction of an 85MW electrolyser, which would be used to create hydrogen and oxygen by splitting water with renewable energy. The hydrogen would be converted to ammonia for export and use by shipping and domestic transport and to support the Port Pirie Industrial Precinct, and the oxygen would be used to supply 20% of the needs of the Port Pirie smelter.
A 440MW electrolyser would be built in the second stage. This larger electrolyser would supply the entire oxygen needs of the smelter, produce large amounts of ammonia for export and maintain supply to the domestic market. The full-scale complex would be capable of producing 100 tonnes per day, which would also help meet domestic supply needs.
The plant would be powered by renewable electricity sourced by Trafigura. The project joins a list of planned hydrogen projects in South Australia.
