Ammonia Project QNP and Project Intro - Feb 2020 Text Text - PowerPoint PPT Presentation

QNP Green Hydrogen to Ammonia Project QNP and Project Intro - Feb 2020

Text • Text Commission 235 ktpa AN 2000 QNP facility near Moura, Queensland BHP 50/50 Glencore ownership 90 employees Ammonium nitrate products – “ Prill ” (left) & “Emulsion” $25-35m local economy

QNP - Location • Approximately 160km east of Gladstone • Southern end of the coal rich Bowen Basin Mines Serviced by QNP CUR URRAGH

QNP Process – opportunity for additional hydrogen and ammonia production QNP Production Process Gas Ammonia Ammonium Customers Nitrate Nitric Acid Purchased ammonia

QNP Green Ammonia Project Concept H 2 O Air Existing New plant New plant QNP Facility Blue Chip Customers • • • Existing QNP ammonium nitrate (AN) New plant - hybrid wind, New plant - electrolysis solar, battery (≈ 200 to producing 3500 t/year of facility, output used for mining 300MW) hydrogen (H 2 ) explosives within Queensland • • New plant – liquid ammonia • Currently using NH 3 from on site gas Approximately 30MW at 80% capacity for (NH 3 ) 20,000 t/year, steam reformation, which is at capacity – additional 20kT/y sourced electrolysis • H 2 storage to absorb from 3 rd parties • 60GWh/yr for existing QNP renewable variability & • Concept is to displace 3 rd party supply facility provide continuous feed to NH 3 plant using new renewables/hydrogen/ammonia plant 5

Expected Final Asset Ownership & Relationships H 2 O Air ASSET OWNERSHIP MW/MWh Supply of capacity & energy to both the new PPA H 2 and NH 3 components, as well as to the existing QNP ammonia nitrate facility. Expertise Electricity supply PM, engineering, delivery Commercials, operations, plant integration 6

• 20 ktpa Ammonia sensible scale up step • Established offtake and customers • 20 ktpa Ammonia sensible scale up step • Blue Chip Australian owners • Experienced chemicals facility operator • Providing grid support services • Renewable energy supply

Green Hydrogen to Ammonia Some knowledge from ARENA supported feasibility underway: • 1 • Interruptible loads OEM inexperienced with dynamic operation of large electrolysers • Significant early step to commercialisation • 2 Scalability and learning to: • take the next step to decarbonise QNP supply chain • Take the next step to scale renewables based hydrogen export potentially via ammonia • 3 • Balancing risk and scale Large green hydrogen project, small in relation to the opportunity - the right size to demonstrate scalability. • 4 • Learn as enablers emerge Build capability in projects beyond studies. Potential enablers include: • Lower cost Renewables • Carbon pricing • Natural gas markets • Hydrogen markets

Potential Business Case Levers NPV Initial Business Feasibility Network Costs Energy Costs Grant Funding Concessional Tax Treatment Final Business Case Engineering Finance Case Business Case Lever

Hydrogen Industry Development End game: New Renewables based hydrogen export industry • Decarbonise existing industries • • Electricity Cost • Viable Business Case • Operate plant to electricity • Funding cost market signals • Risk – proven commercial • Unique operating and application, established contractual arrangements performance characteristics required • Counterparty risk and contractual arrangements • . • Capital Cost • Transmission • Capital/operating trade- Connecting the electricity generation offs – renewables to the market – what to transmit? intermittency/storage • Scale • R&D – technology, manufacturing costs, response times.

Project stages ARENA Hydrogen Round 6 months 8-15 months 24 months Feasibility FEED Delivery Concept • +-30 accuracy – • +-10% accuracy – • Construction and • Prepare initial ARENA Class 2a Class 3 Installation application • Financing and • Finalise • Commissioning • +-50% accuracy – renewables renewables supply Class 1 analysis and financing Q4 2022 – Aug 2019 Q1 2020 Q4 2020 Q1 2023 • ARENA - • ARENA -Full • ARENA -Full Feasibility Study Project Funding Project Funding • Commence Funding approval sought confirmation operations approval • QNP Board • Board sanctions • QNP Board – QNP and approval approval to Neoen proceed 11

Additional Information 12