A $3 billion lignite-to-urea plant is being planned for Southland, with construction targeted to begin within a year and production expected by 2030.

Executive director of Victorian Hydrogen, Allan Blood, says the project would produce urea from Southland lignite through a gasification process, converting the coal to hydrogen and carbon dioxide, which are then combined to make ammonia and urea fertiliser.

“The most recent one was just commissioned late last year in Zambia in Africa. They exist in the United States, and there’s dozens and dozens of them in China.”

New Zealand imports 500,000 tonnes of urea annually, Blood says, and the plant would have capacity to supply the entire domestic market as well as export to Australia. Preliminary discussions are underway with both Ballance Agri-Nutrients and Ravensdown.

“We will export to Australia and also have sufficient capacity to supply all of New Zealand’s needs.”

The project does not expect to require government funding, and the economics are robust at pre-Iran price levels. Urea prices have risen roughly 60 to 70 per cent, he says.

“It is critical for your economy, critical for the agri-sector obviously, and it’ll be a big regional economic contributor to the local economy down there.”

The plant will seek approval through the government’s fast-track consenting process, which Blood says he expects to take under a year. Modular fabrication would be carried out in China before being shipped and erected on site.

“That will employ over 800 New Zealanders doing that for up to two years. And then when it’s up and operating, there’ll be around 200 permanent jobs and probably another 400 indirect jobs outside the fence.”

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