An artist’s impression of the proposed flagship NeuRizer Urea Project. Image: NeuRizer

THE FUTURE of South Australia’s NeuRizer Urea Project remains in limbo, with construction stalled as the development awaits approvals from the Federal Government.

In its annual general meeting held today, the ASX-listed company said it was committed to progressing the project and could have work on Stage One completed within six months of receiving final approvals from the Federal Government under the Environment Protection and Biosecurity Conservation Act.

This update comes after a volatile year for NeuRizer which included suspension from the ASX due to delays to financial disclosures and claims of greenwashing.

The NeuRizer project is one of only two urea production projects being advanced in Australia.

The other, Perdaman’s Project Ceres in Karratha, Western Australia, is currently in the early stages of construction with hopes to start production in 2027.

When fully operational, the NeuRizer plant will produce one million tonnes of urea per annum, while Project Ceres is expected to produce 2.3Mt each year.

NeuRizer, then called Leigh Creek Energy, first completed and trialled its demonstration plant in 2018-19 on the site of the proposed urea plant.

In 2022 releases to the ASX, NeuRizer estimated that construction on the urea plant would commence in 2023 with full production to be under way by 2025.

However, due to changes in federal environmental approvals, site work has not started, apart from NeuRizer maintaining and monitoring the initial demonstration plant at Leigh Creek.

The company had received all approvals required to commence construction in late 2023, until amendments to the EPBC Act meant the project needed further approvals.

This meant the project would need to be assessed by an Environmental Impact Statement.

NeuRizer is progressing the EIS for Stage One of the project which includes the construction of a syngas production facility and a small-scale power generation unit.

Stage Two will involve the construction of the urea production plant and supporting infrastructure.

NeuRizer referred Stage One of the project to the EPBC in April 2023, with the draft EIS guidelines released in September this year.

The public consultation on the document closed November 11.

The Department of Climate Change, Energy, the Environment and Water will assess the project and consultation responses before announcing a final decision.

NeuRizer executive chairman Justyn Peters told shareholders there was no clear timeline for the project, with the Federal Government not providing any information on timeframes needed to complete the approvals.

He said it was unclear how long DCCEEW would need to finalise the process.

“Stage One approval is the one that we are currently going through with the Federal Government, and that could take six months; it could take 12 months,” Mr Peters said.

“We just don’t know how long it’s going to take.”

He said once approvals were granted, construction could commence at the site.

“We think we can deliver Stage One within six months of their final approval.

“The engineering has been done for the site; the procurement has been done for the site.

“We will get full quotes in for construction, but even on all that, we cannot commit and go forward until we get the approval and that’s the thing that’s holding us up.”

Delays abound

Mr Peters criticised the extra regulatory processes put on to the project by the SA and Federal governments, and called out the lack of consultation on the regulation changes.

“The unnecessary requirement for the company to refer the project to the Federal Government, legislative changes, and then the time taken to secure the draft terms of reference for Stage One has delayed our ability to proceed on-site.

“Additionally, the lack of consultation with industry on amendments to the EPBC Act highlights the challenges posed by increasing regulatory complexity.

“Despite these hurdles, NeuRizer remains committed to contributing to Australia’s energy, ammonia, and fertiliser needs.”

‘Room for two players’

Mr Peters said many shareholders had questioned why the NeuRizer project had hit roadblocks while the Perdaman plant was progressing to the construction phase.

“Some shareholders have questioned why another Australian project seems to have progressed faster.

“A Western Australian project often cited as a ‘success’ started their urea project in 2009, with their first offtake agreement signed 10 years ago.

“NeuRizer’s offtake agreements with Daelim and Samsung, by comparison, were finalised in the past two years.

“It is important to recognise the timeframes required for major projects to reach critical milestones, with a lot of the timelines out of our control.”

He said assured shareholders that there was “plenty of room for two players in this area”.

“We believe from a cost point of view that they can’t compete with us.

“They have to buy their gas, and they have to buy their water.”

He said “it would appear that most of their fertiliser will be going overseas” while NeuRizer has the option to supply some of the domestic market.

Not without critics

While Mr Peters was optimistic that Stage One would receive EPBC approvals, the project has attracted criticism from environmental groups and think tanks due to its use of underground coal to produce “synthetic” gas, known as syngas.

In a submission to the EPBC, public policy think tank The Australia Institute concluded there was “no clear economic justification for the NeuRizer Urea Project”.

“Stage One is a loss-making, unnecessary electricity generation scheme,” the submission said.

“Stage Two is a speculative attempt to develop a urea plant in a remote area, far from markets, based only on provision of a gas supply.

“This kind of project has a thorough history of failure.”

The Conservation Council of South Australia has long been critical of the project and was behind a complaint made to ASIC last year claiming NeuRizer was falsely promoting its proposed plant as “carbon neutral” and “net zero”.

NeuRizer has since stepped back from these claims.

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