QNP

Green Hydrogen to

Ammonia ProjectQNP and Project Intro - Feb 2020

Text

•Text

Commission

2000

BHP

Glencore

90

employees

235 ktpa AN

QNP facility near Moura, Queensland

Ammonium nitrate products – “Prill” (left) & “Emulsion”

50/50

ownership

$25-35m local

economy

QNP - Location

• Approximately 160km east of Gladstone

• Southern end of the coal rich Bowen Basin

Mines Serviced by QNP

CURRAGH

QNP Process – opportunity for additional

hydrogen and ammonia production

Ammonia

Nitric Acid

Ammonium

Nitrate

Purchased

ammonia

Gas

QNP Production Process

Customers

QNP Green Ammonia Project Concept

H2O Air

• New plant - hybrid wind,

solar, battery (≈ 200 to

300MW)

• Approximately 30MW at

80% capacity for

electrolysis

• 60GWh/yr for existing QNP

facility

• New plant - electrolysis

producing 3500 t/year of

hydrogen (H2)

• New plant – liquid ammonia

(NH3) 20,000 t/year,

• H2 storage to absorb

renewable variability &

provide continuous feed to

NH3 plant

• Existing QNP ammonium nitrate (AN)

facility, output used for mining

explosives within Queensland

• Currently using NH3 from on site gas

steam reformation, which is at

capacity – additional 20kT/y sourced

from 3rd parties

• Concept is to displace 3rd party supply

using new

renewables/hydrogen/ammonia plant

New plant New plant

Existing

QNP Facility

5

Blue Chip Customers

Expected Final Asset Ownership & RelationshipsA

SS

ET

OW

NE

RS

HIP

PPA

MW

/MW

h

Supply of capacity & energy to both the new

H2 and NH3 components, as well as to the

existing QNP ammonia nitrate facility.

6

H2O Air

Ex

pe

rtis

e

Electricity supply Commercials, operations, plant integrationPM, engineering, delivery

•Blue Chip Australian owners

•Experienced chemicals facility operator

•Providing grid support services

•Renewable energy supply

•20 ktpa Ammonia sensible scale up step

•Established offtake and customers

•20 ktpa Ammonia sensible scale up step

Green Hydrogen to AmmoniaSome knowledge from ARENA supported feasibility underway:

•1

•2

•3

•4

•Interruptible loads

OEM inexperienced with dynamic

operation of large electrolysers

• Significant early step to commercialisation

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

•Balancing risk and scale

Large green hydrogen project, small in

relation to the opportunity - the right size

to demonstrate scalability.

•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

Initial Business

Case

Feasibility

Engineering

Network Costs Energy Costs Grant Funding Concessional

Finance

Tax Treatment Final Business

Case

NP

V

Business Case Lever

Hydrogen Industry DevelopmentEnd game:

• New Renewables based hydrogen export industry

• Decarbonise existing industries• Viable Business Case

• Funding cost

• Risk – proven commercial

application, established

performance characteristics

• Counterparty risk and

contractual arrangements

•.

• Electricity Cost• Operate plant to electricity

market signals

• Unique operating and

contractual arrangements

required

•TransmissionConnecting the electricity generation

to the market – what to transmit?

•Capital Cost• Capital/operating trade-

offs – renewables

intermittency/storage

• Scale

• R&D – technology,

manufacturing costs,

response times.

Project stages

11

Concept

• Prepare initial ARENA

application

• +-50% accuracy –

Class 1

FEED

• +-10% accuracy –

Class 3

• Finalise

renewables supply

and financing

Feasibility

• +-30 accuracy –

Class 2a

• Financing and

renewables

analysis

Delivery

• Construction and

Installation

• Commissioning

Aug 2019

• ARENA -

Feasibility Study

Funding

approval

• QNP Board

approval to

proceed

Q1 2020

• ARENA -Full

Project Funding

approval sought

• QNP Board

approval

Q4 2020

• ARENA -Full

Project Funding

confirmation

• Board sanctions

– QNP and

Neoen

Q4 2022 –

Q1 2023

• Commence

operations

6 months 8-15 months 24 months

ARENA Hydrogen

Round

Additional

Information

12