A name change for Leigh Creek Energy this week has placed the company firmly on a pathway towards construction of the first domestic urea facility in South Australia.
The rebranding to NeuRizer (ASX: NRZ) was approved by shareholders at a general meeting last week and is believed to be a better reflection of the company’s vision and business.
The new moniker incorporates the “N” in nitrogen fertiliser (urea), while “Neu” relates to a new way of producing urea using a net zero carbon footprint.
The remaining “Rizer” is associated with the crops which are dependent on urea for their growth and which rise from the ground when adequately fertilised.
Name change nod
Managing director Phil Staveley said the name change is a nod to the urea fertiliser, which will be manufactured at the company’s planned $2.6 billion NeuRizer project (formerly the Leigh Creek urea project), while recognising the company’s upwards trajectory as a manufacturer.
“Urea fertiliser is the building block of crop production across the globe and NeuRizer will be Australia’s first sovereign manufacturer of carbon neutral, nitrogen-based product for local and export agricultural markets,” he said.
“Our ambition is to create a world-leading, low-cost domestic urea manufacturing capability right here in South Australia which will help feed the world’s ever-growing population.”
The company is expecting to release a detailed bankable feasibility study for the project shortly, ahead of a final investment decision later this year.
Mr Staveley said the looming closure of Incitec Pivot’s (ASX: IPL) Gibson Island urea manufacturing facility in Brisbane will put further pressure on local supplies.
“It means Australia will soon have zero domestic production capacity for this essential input for the farming industry,” Mr Staveley said.
“NeuRizer is the new solution to protecting our national sovereignty and ensuring we have strong local production of carbon-neutral urea which our agricultural sector cannot exist without.”
He said the company’s unique advantage is a long-term supply of low-cost feedstock from its reserves, allowing for a fully-integrated production facility with all major inputs (such as gas, power and carbon dioxide) available on site.
This will lock in a significant cost advantage over global competitors and will help achieve carbon neutrality through onsite technologies and offsets if necessary.
Its nitrogen-based fertiliser costs are expected to be around $110 per tonne, compared to global prices, which have reached close to $1,200/tonne in recent weeks.
NeuRizer’s project is one of three new urea developments proposed around Australia, with Strike Energy (ASX: STX) and Perdaman Group each planning to build similar operations in Western Australia.
The company’s offering – which sits on the site of a coal mine which closed in 2015 – will be the only fully-integrated facility, with its own source of cheap gas.
NeuRizer plans to use in-situ coal gasification to produce synthetic gas (or syngas) for around $1 per gigajoule, which represents a fraction of the typical gas costs for industrial users.
Zero carbon operations
The NeuRizer project has been designed to achieve zero carbon operations from first production in 2025, with an initial output of 1 million tonnes per annum of urea fertiliser and potential to increase to 2Mtpa.
It will be one of the biggest infrastructure developments of its type in Australia and is expected to strengthen the nation’s supply chain resilience, while reducing its reliance on imported products for the agricultural and industrial sectors.
Mr Staveley said NeuRizer would retain control over the supply and price of major cost inputs, regardless of prevailing market conditions and supply chain dynamics.
Global fertiliser markets are currently facing disruptions and soaring prices due to the Russia-Ukraine war.
Tensions have also resulted in surging gas prices which feed directly into the cost of fertiliser that farmers worldwide need to sustain their food crops.
Russia typically accounts for about 15% of global urea exports, while Australia imports 2.4Mtpa of agricultural urea to meet more than 90% of the nation’s needs.