Strike and Koch Fertilizer Agree to Urea Offtake Term Sheet

Source: 5/19/2022, Location: Not categorized

• Strike completed its competitive fertiliser offtake process by agreeing to a non-binding term sheet and exclusive negotiation period with Koch Fertilizer
• The offtake would cover 100% of the 1.4mtpa urea production capacity of Strike’s proposed Project Haber development for a period of up to 15 years.

Strike Energy Limited is pleased to announce it has completed its competitive fertiliser offtake process and selected Koch Fertilizer, LLC (Koch Fertilizer) — a wholly owned indirect subsidiary of Koch Industries, Inc. — as the preferred bidder for the offtake of 100% of the 1.4 million tonnes per annum of granulated urea production from Strike’s proposed Project Haber fertiliser development.

Strike and Koch Fertilizer have entered into a non-binding term sheet and will now enter into the drafting and negotiation of a full form definitive offtake agreement reflective of key terms agreed in the term sheet, which include a 10-15 year supply period, pricing linked to international benchmarks and a condition precedent relating to Project Haber’s final investment decision.

Strike Managing Director & Chief Executive Officer, Stuart Nicholls said:
“This award creates the foundations for an exciting and transformational period for the Company, at the conclusion of which Strike will have completed its journey to becoming a fully vertically integrated manufacturer of high energy intensive and low carbon emission products.”

“Securing Koch Fertilizer as Strike’s sole offtaker would give Project Haber a high degree of creditworthiness and financial security. Having a single long-term offtaker for 100% of the urea production will provide the foundation for the financial architecture required to successfully finance this nationally significant development.”

“Australia’s farmers are set to benefit from the re-domestication of Australian urea manufacturing, which will secure a local supply of globally cost competitive, low carbon emission nitrogen-based fertiliser. With global urea prices at all-time highs, the timing for this development in Australia is now.”

About Project Haber
Project Haber is Strike’s fully integrated 1.4 mtpa low carbon urea development based at the edge of the West Australian Wheatbelt in the Mid-West region. Through the integration of Strike’s adjacent low impurity natural gas, application of global best in class ammonia technology, domestication of fertiliser supply and incorporation of green hydrogen, Strike is aiming to develop a low carbon urea product to support the abatement of Australia’s agricultural emissions. Project Haber’s urea will support Australia’s farmers by improving the availability of nitrogen-based fertiliser and removing expensive supply chain costs ultimately delivering low cost and low carbon fertiliser product to farms across the country.

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