Hexagon Energy and Oceania ink MoU on low-emissions ammonia bunkering in Pilbara region

Hexagon Energy Materials Limited (Hexagon) on Monday (13 May) announced that it has signed a Memorandum of Understanding (MoU) with Oceania Marine Energy Pty Ltd (Oceania) regarding the potential development of a low-emissions ammonia bunkering business at Dampier, in the Pilbara region of Western Australia.

While the primary market for the WAH2 Project’s low-emissions ammonia remains substitution of coal in thermal power generation in Japan and South Korea, ammonia bunkering has the potential to be a valuable, additional, domestic market. 

“This would involve the supply of low-emissions ammonia as a fuel for the bulk carriers that ship iron ore exports from Australian producers to customers across Asia,” Hexagon said in an announcement on the Australian Securities Exchange. 

“This collaboration has the potential to create a new Australian business that uses locally-produced low-emissions ammonia to help decarbonise Australia’s iron ore exports.”

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 demand for ammonia bunkering and potential commercial terms;
• Defining an appropriate development plan; and
• Engaging with government and other stakeholders.

Hexagon and Oceania 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.

The MOU has a two-year term to allow for subsequent collaboration past the anticipated final investment decision for Hexagon’s WAH2 Project.

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

Chief Executive Officer Stephen Hall, said: “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.”

Photo credit: Hexagon Energy
Published: 14 May, 2024