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Hexagon and Oceania Marine Energy sign MoU on ammonia bunkering in Pilbara

Hexagon Energy Materials and Oceania Marine Energy have signed a Memorandum of Understanding (MoU) for the potential development of an ammonia bunkering business at Dampier, in the Pilbara region of Western Australia, as part of the WAH2 hydrogen production project.

While the primary market for the WAH2 Project’s ammonia remains the substitution of coal in thermal power generation in Japan and South Korea, ammonia bunkering has the potential to be an additional business for the domestic market. This would involve the supply of ammonia as a fuel for the bulk carriers that ship iron ore exports from Australian producers to customers across Asia.

Under the MoU, Hexagon and Oceania have committed to work together with the intention of demonstrating the feasibility of the supply of low-emissions ammonia as a bunker fuel for iron ore bulk carriers via ship-to-ship transfer and confirming demand for ammonia bunkering and potential commercial terms.

The companies will jointly engage with stakeholders, including government, ship owners, fuel traders, iron ore producers, and port authorities to complete their market assessment, develop an appropriate business model and development plan and pursue preliminary offtake agreements for ammonia as a bunker fuel. It is envisaged that this work will be completed in Q4 2024.

The MoU has a two-year term to allow for follow-on collaboration beyond the anticipated final

investment decision for Hexagon’s WAH2 Project. Hexagon’s target for WAH2 remains front end engineering design (FEED) entry in mid-2024 following completion of planned technical work and the finalisation of conditional commercial agreements for key aspects of the project – noting that a bunkering offtake agreement is not considered a pre-requisite for FEED entry, rather an opportunity to add incremental value during FEED.

Hexagon says it intends to have the key agreements in place to support the start of FEED in Q3 2024.

The company’s Chief Executive Officer Stephen Hall commented: ‘This Memorandum of Understanding with Oceania Marine Energy represents another significant step for Hexagon’s WAH2 low-emissions ammonia project.

‘It offers the opportunity to establish a new bunkering industry in Western Australia that could play a leading role in decarbonising Australia’s iron ore exports for the benefit of Australia and its trading partners in Asia. This opportunity offers market diversity, requires no additional capital expenditure and is complementary to Hexagon’s primary objective of exporting low-emissions ammonia from WAH2 to help decarbonise power generation in Asia.

‘I look forward to making further announcements as Hexagon continues to progress confidential negotiations with key input providers, potential off-takers and strategic partners.’

Image: Shutterstock

Lesley Bankes-Hughes

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