Incitec Pivot Limited (IPL) will cease manufacturing at its Brisbane-based Gibson Island plant at the end of December 2022 after exhaustive efforts were unable to secure an affordable long-term gas supply from Australian gas producers.

IPL Managing Director and CEO Jeanne Johns said after 50 years of continuous production and reinvestment at Gibson Island, the company was disappointed it was unable to secure affordable feedstock gas for the plant.  IPL will focus on its green ammonia feasibility study at Gibson Island to potentially re-purpose the site for the future.

“We kept our promise to pursue every possible avenue to continue with gas as a feedstock for our manufacturing operations at Gibson Island, but despite significant efforts over recent months we have been unable to secure affordable gas supply beyond the end of our current gas contract,” Ms Johns said.

“We are deeply disappointed that this will impact our loyal employees and their families. The wellbeing and safety of our employees is our key priority during the next 14 months, and we will be offering our people whatever assistance we can, including redeployment opportunities where possible.

“I would like to thank our many agricultural and industrial customers and suppliers who have supported our manufacturing operations at Gibson Island. We will be working to support them as we manage this transition.

“The Queensland Government’s support of domestic manufacturing helped us secure our existing contract, and we are grateful for their support during the past few years as we have sought to bridge to a long-term sustainable manufacturing base at Gibson Island.”

APPEA said that in nine consecutive reports from the Australian Competition and Consumer Commission it has been made very clear that there is no shortfall in gas for the domestic market.

“Indeed, there have been more than 111 new gas supply and commercial agreements signed in the past nine years including 15 (9 in Queensland) in 2021 that include Australia Pacific LNG, Senex Energy, Blue Energy, Westside and others.

“The Australian oil and gas industry will continue as it always has to provide gas at commercial prices and volumes to domestic manufacturers. Other companies have been able to come to agreements that secure gas at agreed prices and commercial arrangements.”

IPL recently announced a partnership with Fortescue Future Industries (FFI) to conduct a feasibility study into industrial-scale manufacturing of green ammonia conversion from renewable hydrogen at Gibson Island, potentially creating a low-carbon future for the plant.

“IPL’s feasibility study with FFI is an exciting opportunity aligned to our pathway towards a decarbonised future. We will keep our employees informed of key milestones and how potential green ammonia manufacturing at Gibson Island could inform how we manage the planned closure of the manufacturing plant,” Ms Johns said.

IPL will continue to operate its other major Queensland manufacturing facilities. These include a major fertiliser plant at Phosphate Hill, an explosive manufacturing plant at Moranbah, an explosives manufacturer joint venture partnership, and a high technology blasting products manufacturing facility.