Victorian Hydrogen last Wednesday revealed its plans for the project — it is expected to apply for approvals under the fast-track regulatory process — which would produce 1.5 million tonnes of fertiliser annually from a facility about 30km northeast of Invercargill.
In a statement, the company said it would offer an environmentally innovative and strategically significant alternative to imported urea fertiliser while also delivering significant investment and employment opportunities in the region.
Initial geological and hydrological studies would be completed by spring and there would be a targeted three-year pathway from the conclusion of the very detailed studies under way to full production.
Victorian Hydrogen executive director Allan Blood said the company was dedicated to transparent engagement with stakeholders, including local iwi, Ngāi Tahu rūnanga, councils, farmers and landowners across the 3141ha exploration area.
There would be no requirement to acquire farms and mining would occur in long, narrow strips affecting only a small portion of land at any one time. Land would be rehabilitated progressively.
"We hope that the project will be seen as a substantial additive to annual farm income," he said.
The technology used in the lignite gasification process was well established globally and the world’s latest urea plant, using technology identical to what would be used in Southland, was commissioned in Zambia late last year, he said.
Lignite reacted with oxygen at high temperatures and low pressures to produce syngas, which then reacted with steam to produce hydrogen. Hydrogen was combined with atmospheric nitrogen to produce ammonia and ammonia was then reacted with captured carbon dioxide from previous reactions to produce urea.
Various opportunities were being investigated around environmental management, including using carbon dioxide to make algae-based cattle feed, liquid fuels, construction materials, and in inhibitor technologies to reduce nitrous oxide emissions. The project would generate its own electricity, some of which could be exported to the grid.
Mr Blood said New Zealand was exposed to global fertiliser shocks it could not control and the project was about providing national self-sufficiency for the next 50-plus years.
New Zealand imported 500,000 tonnes of urea annually and it also manufactured 265,000 tonnes, but falling gas supply meant domestic production might end, he said.
Southland District Mayor Rob Scott was not aware of all the details of the proposal, but said a lot of urea was used in the South.
Having a local supply would be a real advantage, reducing demand on overseas imports and a reliance on shipping.
There was a lot of investment occurring in the South, which was reflected in its GDP contributions.
The balance to that was impact not outweighing investment and that would need to be looked at down the track, he said.
