Incitec Pivot article - The Australian, page-5

Why would we send them our gas? If they can't operate efficiently thats' their problem. Those 400 families should go ask the Qld govt and Media for the evidence of "the worst environmental disaster of all time in Qld" to learn why they can't get cheap Syngas from UCG and why their jobs are going to go. Why support Gibson Island and take skilled employees out of the available labour pool we might need in the future?

As I understand it, we get Syngas out of the ground for about a buck. It costs $2-$3 to convert into pipeline gas (methane) then IP can take it out at their end and spend another $2-$3 to turn it back into Syngas. I can't see that as being efficient or viable unless we owned GI. Incitec look like they will be closing Gibson Island and importing the fertiliser from USA to sell here.

LCK have said more times than I can print that Fertiliser has the best margins and is likely to be the chosen direction. This would also make us a food/ ag/ energy company not a coal company.

I understand that CNE already operate a fertiliser plant and as has been said CCCC are surely not coming down here to talk about building just one plant using the ISG process. CCCC would have their local subsidiary do that if that is all they planned. There is a lot of stranded coal in China but very few people who know how to do this- and can demonstrate that it can be done safely.

My only questions from this article are:

1. Is there a gas shortage or did IP just box their bid into an unrealistic corner?
2. Will LCK build a fresh plant or would it be cheaper to dismantle Gibson Island and send parts to South Australia?
3. Could it cheaper for LCK/CNE/CITIC to take GI off Incitecs hands for $1 to keep it operational -cheaper for IP than rehabilitating the site- and then building a pipeline, converting to methane, converting back to Synthgas?
4. Is there any reason they can't do both, build a new plant in SA and keep GI operating? Keep SA fertiliser in Australia and send GI fertiliser up to Asia, or vice versa. Where is the nearest deep water port in SA?