THE PROJECT
Secure Domestic Fertiliser Supply
Pan Pacific Fertilisers Ltd is proposing a large-scale urea manufacturing facility designed to strengthen New Zealand's agricultural resilience and reduce exposure to volatile international fertiliser markets. The project will use Southland lignite as a feedstock to convert to gas, together with atmospheric nitrogen and oxygen, to produce 1.5 million tonnes of urea fertiliser through established industrial processes using long-established, proven technology.
The development timeline will depend on final engineering and economic modelling, as well as completing the fast-track approval process, which the company is entering.
The project is designed to reduce environmental impact by using efficient technology, actively lowering emissions, and carefully managing and restoring land so only small areas are affected at any one time. Farmland will be returned in as good, or better condition than when first mined.
Emissions will be reduced by using modern, energy‑efficient technology and proven methods such as capturing and reusing carbon, with the goal of achieving net‑zero, or potentially lower, emissions.
The Process
1. Mining
Lignite is mined, crushed and dried to approximately 12.5% moisture content.
2. Gasification
The crushed and dried lignite is reacted with oxygen in a long-proven gasification system, under high temperature and pressure, to create synthesis gas (syngas).
3. Hydrogen Production
Gas formed from gasification is then heated with steam. CO + H20 H2 + C02
4. NH3 Production
Nitrogen from atmospheric air is reacted with hydrogen to form ammonia (NH3)
5. Urea
Urea is formed by combining ammonia and CO2. (NH3 + CO2)
PRODUCTS PRODUCED
Hydrogen
Syngas is reacted with steam to produce hydrogen and carbon dioxide, both of which are captured.
Ammonia
Hydrogen is combined with nitrogen to produce ammonia which provides essential nitrogen to crops.
Urea
Ammonia is reacted with CO2, to produce Urea, a versatile compound with the highest nitrogen content of any solid fertiliser.
Project Location
The proposed facility will be located approximately 30 kilometres southeast of Invercargill in Southland, New Zealand.
Southland contains substantial shallow lignite deposits that are well suited to gasification for fertiliser production. These deposits can be mined efficiently with comparatively lower land disturbance than deeper mining operations, with the land being restored to its original condition or better.
The region is also strategically positioned with access to industrial infrastructure, transport networks, and export pathways.
Southland lignite is chemically similar to Victorian lignite in Australia, with which the project team has extensive experience working with, to convert it to gas in energy and industrial applications, including urea fertiliser.
Environmental Management
Pan Pacific Fertilisers is committed to addressing greenhouse gas impacts as part of the project from the outset, with the goal of achieving a net-zero - or potentially net-negative - emissions profile through the application of science-based emissions management technologies.
Potential emissions reduction and utilisation pathways being explored include:
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Algae-based cattle feed production
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Low-emissions liquid fuels
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Construction materials manufacturing
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Carbon utilisation technologies
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Nitrous oxide inhibitor technologies for agriculture
The proposed facility will use modern, high-efficiency processing technology designed to minimise environmental impacts while maximising energy efficiency.
Mining operations will be designed to minimise disruption to farming activities through progressive rehabilitation and staged land use. Mining would occur in long, narrow strips affecting only a limited area at any one time, with rehabilitation undertaken progressively.
There will be no requirement to acquire farms. Landowners will be compensated for any impacts on productivity, with the project designed to provide a substantial additional income stream for participating landowners.
Socio-economic Benefits
The project will support New Zealand agriculture, which constitutes over half the nation's economy. New Zealand currently imports approximately 500,000 tonnes of urea each year, and domestic production of 265,000 tonnes is under pressure due to declining natural gas availability.
The proposed project aims to:
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Improve New Zealand's fertiliser security.
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Reduce reliance on imported urea.
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Help stabilise fertiliser pricing for farmers.
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Reduce exposure to foreign exchange and pricing risk, and international supply chain risks.
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Produce additional products such as AdBlue diesel exhaust fluid.
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Support electricity system reliability by reducing production during peak demand periods, potentially freeing up to 114 MW of power capacity, which could go back to the grid.
The project is expected to deliver significant economic benefits to Southland and New Zealand, including:
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Up to 1,000 construction jobs.
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Approximately 180-200 permanent onsite operational roles.
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Hundreds of additional indirect jobs across contracting, logistics, engineering, and support services.
The project will also help preserve New Zealand's long-term fertiliser manufacturing capability as domestic natural gas reserves decline.