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Australian Hexagon Energy Materials has signed a memorandum of understanding (MoU) with compatriot Oceania Marine Energy regarding the potential development of a low-emissions ammonia bunkering business at Dampier, in the Pilbara region of Western Australia.

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, confirming the demand for ammonia bunkering and potential commercial terms, defining an appropriate development plan and engaging with government and other stakeholders.

Hexagon said the two parties will jointly engage with stakeholders, including ship owners, fuel traders, iron ore producers, port authorities and government to complete their market assessment, develop an appropriate business model and development plan and pursue preliminary offtake agreements for low-emissions ammonia as a bunker fuel.

It is envisaged that this work will be completed in Q4 2024, Hexagon added, stating that the MoU has a two-year term to allow for subsequent collaboration past the anticipated final investment decision (FID) for Hexagon’s flagship WAH2 project that intends to supply low-emissions ammonia to the decarbonizing economies of the Asia Pacific, including Japan and South Korea.

Hexagon revealed that the company’s target remains WAH2’s front-end engineering design (FEED) entry in mid-2024 following the completion of planned technical work and finalization 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. The company intends to have the key agreements in place to support the start of FEED in Q3 2024.

The WAH2 project plans to use “proven” technology to convert natural gas into ammonia, as well as to capture and sequester more than 90% of the associated CO2 to produce 600 kTPA of low-emissions ammonia. This low-emissions ammonia would then be transported by pipeline to the Port of Dampier where it would be loaded onto gas carrier ships for export. The first production is targeted for late 2028.

Stephen Hall, Chief Executive Officer (CEO) of Hexagon, 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.”

Nick Bentley, Managing Director of Oceania, stated: “Oceania is enthusiastic to work with Hexagon on aligning our low-emissions ammonia production and bunker operations to meet market requirements. The key objective of our MOU is to demonstrate a viable supply of low-emissions ammonia bunker fuel, developed on a timeline to meet market demand, and in the most efficient location for the iron ore ships transporting Australian iron ore to Asia.”

To note, Oceania Marine Energy aims to supply low-emissions fuel, such as ammonia, to iron ore carriers via ship-to-ship transfer and has a target of delivering over 1 million tonnes of low-carbon marine fuel by 2030.

In 2022, Oceania completed its feasibility study into the bunkering of ammonia at Dampier, and according to Hexagon, since then, it has continued to work with stakeholders across the value chain towards the establishment of a ‘Green Shipping Corridor’ between Australia and Asia.


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