Fortescue Future Industries has just received a multi-million Federal Government grant towards a major hydrogen conversion project.
Fortescue Metals Group Limited (ASX: FMG) shares are 1.14% in the red today and are currently trading at $17.40. For perspective, the S&P/ASX 200 Index (ASX: XJO) is down 0.53% today.
So what are the details of Fortescue's green hydrogen plans?
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Huge hydrogen boost
Fortescue Future Industries, together with Incitec Pivot Limited (IPL) will advance plans to convert IPL's Gibson Island ammonia facility to run on green hydrogen.
Today, the Australian Renewable Energy Agency (ARENA) advised that Fortescue and IPL will receive $13.7 million from the Federal Government.
This will go towards a front-end engineering and design study (FEED). This study will investigate converting the ammonia plant to use 100% renewable hydrogen from a 500MW hydrogen electrolysis facility.
Fortescue Future Industries, a global green energy company, is owned by Fortescue Metals.
The total cost of the FEED stage of the project is about $38 million. A Final Investment Decision (FID) on the project is due in 2023.
Commenting on today's news, Fortescue Future Industries CEO Mark Hutchison said:
Progressing this project into this final assessment stage is an important milestone in what will be a world-first conversion of an existing facility to become an industrial-scale producer of green hydrogen and green ammonia.
One hundred jobs are set to be created at the project in the lead-up to this investment decision, with production targeted in 2025.
ARENA CEO Darren Miller said:
This is an exciting project for the parties involved and for Australia.
Fortescue share price snapshot
The Fortescue Metals share price has soared 25% in the past year, while it has lost 9% in the year to date.
For perspective, the ASX 200 has shed nearly 7% in the past year, while falling 9% year to date.
Fortescue has a market capitalisation of more than $53 billion based on the current share price.
