Fortescue focussed on green ammonia over hydrogen

Five Second Summary:

Fortescue Metals Group will make final investment decisions on 5 green energy projects, four of which will start out as green ammonia, which is easier to transport than hydrogen.

The companies:

• Fortescue Metals Group (FMG)

What's happening:

• Fortescue is aiming for final investment decisions on five projects by December 31.

• The projects span locations like Queensland, Phoenix, Arizona, Brazil, Norway, and Kenya, highlighting the global scope for Fortescue's green energy ventures.

Numbers + facts:

• Fortescue has outlined plans for 385,000 tonnes/year ammonia export in Queensland, 12,000 tonnes/year hydrogen in Phoenix, 300,000 tonnes/year ammonia in Brazil, Norway plant, and green ammonia production in Kenya using geothermal energy.

• All projects come with fixed-price take-or-pay contracts, and Fortescue plans to hold equity stakes of 25-50%, selling the remainder to sovereign wealth funds.

• Target for 50-60% debt funding and a mid-teen rate of return.

Looking ahead:

• Fortescue's focus on green ammonia in the initial stages aligns with pragmatic considerations for easier transport - green hydrogen as an energy source is still facing pressure to justify its economics.

• Fortescue has been a leader in green hydrogen projects, but we expect other companies to continue to join the fray as electrolyser costs come down and project economics improve with technological advances.

Read more: Fortescue focussed on green ammonia (via AFR)