Fortescue hits a hat-trick of delays for green project

For the third time in just over three months, Andrew Forrest’s Fortescue has missed the deadline to give its Gibson Island green hydrogen and ammonia project in Queensland the investment green light.

On the final day of February, Genex Power told the Australian Securities Exchange it had once again agreed to let Fortescue delay a final investment decision for Gibson Island, this time from the end of February to the end of March.

In late December that deadline was originally extended from the end of 2023 to the end of February.

In response to queries about the third delay, a Fortescue spokesperson repeated the same statement it provided for the first two missed deadlines.

“We are progressing our Gibson Island project, but we have more work to do,” he said.

“We are approaching this project with the same financial discipline Fortescue has shown for 20 years.”

Genex and Fortescue are no longer extending the deadline, meaning either party can now terminate the power purchase agreement.

Genex signed a 25-year deal in October to supply the miner’s Gibson Island project with power from a 337.5 megawatt-capacity solar farm.

The sunset date to reach financial close on this 25-year deal has also been dragged back from the end of March 2025 to the end of April 2025.

A spokesman from Fortescue told The West Australian in December the company has “every intention” of progressing its Gibson Island project to a final investment decision, but there was still more work to do.

“We know there is enormous demand in the market for green hydrogen and green ammonia, and we are having positive conversations with the Australian and Queensland governments,” he said at the time.

On Thursday, a Fortescue spokeswoman reiterated that “we have more work to do” at Gibson Island.

“We are approaching this project with the same financial discipline Fortescue has shown for 20 years,” she said.

Mr Forrest’s Fortescue failed to meet promises of having five green energy and metals projects reach a final investment decision by the end of 2023.

The company has so far pulled the trigger to invest $US750 million ($1.1 billion) in “two green energy projects and a green metals project”.

In a statement to the ASX announcing the investment green light for three projects in November, Fortescue Energy chief executive Mark Hutchinson said each of the projects would deliver double-digit investment returns.

“With a disciplined approach to capital allocation, we continue to target double-digit project returns,” he said.

Mr Hutchinson declined to provide specific details about the targeted returns for each of the approved projects when questioned by The West Australian following the company’s annual general meeting later in November.