Fortescue’s green energy ambitions take another hit with FID on Gibson Island project dragged back again

Adrian Rauso
The West Australian
2 Min Read
Andrew Forrest’s Fortescue has delayed a final investment decision for Gibson Island.
Andrew Forrest’s Fortescue has delayed a final investment decision for Gibson Island. Credit: AAP

For the second time in just over two months Fortescue has postponed giving its Gibson Island green hydrogen and ammonia project in Queensland the green light.

Genex Power told the Australian Securities Exchange on Thursday 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 pushed out from the end of 2023 to the end of February.

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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.

“Both understand the value that can be unlocked for the country through projects like these, as part of the global green energy transition.”

Andrew 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”.

It has budgeted $US550m for a hydrogen hub in the US state of Arizona, $US150m towards a hydrogen project in Queensland and a $US50m “green iron” commercial plant trial at its Christmas Creek iron ore operations in the Pilbara.

Earlier this month Fortescue Energy chief executive Mark Hutchinson refused to provide any indication as to when the company would push the button on the other two projects.

“We are going to maintain our financial discipline . . . we have a really good project pipeline but we’ll come to the market when we’re ready,” he told analysts.

Questions have also been raised about the investment returns of Mr Forrest’s green projects, with the division burning through another $US165m in cash during the first half of the 2024 financial year.

In a statement to the ASX announcing the investment green light for three projects in November, Mr 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 detail over 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.


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