The Fortescue Future Industries (FFI) division of Fortescue Metals Group Limited (ASX: FMG) recently revealed a large green deal with Papua New Guinea (PNG). Interestingly, the Fortescue share price jumped 9% yesterday.
Fortescue Future Industries’ deal with PNG
FFI is partnering with PNG to develop multiple large-scale green energy and green hydrogen projects.
A master development agreement has been signed that will enable FFI to undertake feasibility studies to develop up to seven hydropower projects and 11 geothermal energy projects in PNG.
These projects could generate renewable electricity so that it can power the production of green hydrogen and green ammonia, creating a significant new domestic energy and export industry for PNG. PNG currently relies on imported oil.
Fortescue Future Industries believes that there are projects in PNG that could produce up to 2.3 million tonnes of green hydrogen per year, once completed.
Fortescue Chairman, Dr Andrew Forrest thinks that PNG could become a world leader in the renewable energy transition. It also wants to ensure that PNG’s people benefits from the growth and development of these projects, including training, employment and business development opportunities.
Project progress
FFI said its proposed Purari Wabo Hydropower project and West New Britain Geothermal project have made significant progress with scoping studies and early-stage pre-feasibility works completed.
These projects will be conducted in full compliance with PNG laws and follow strict international best practice standards relating to the conservation and protection of the environment, biodiversity and cultural heritage, occupational health and safety, anti-bribery and corruption, anti-money laundering and ending modern slavery.
Management comments
FFI Chief Executive Officer, Julie Shuttleworth said: “Our green energy vision for PNG will lead to more jobs, a stronger economy, thriving communities and importantly, lower emissions for Papua New Guinea.
“We share Prime Minister Marape’s vision that PNG can be at the forefront of developing hydropower and geothermal resources for the emerging global green hydrogen industry.
“We are looking forward to continuing our work alongside the Government of Papua New Guinea to develop these important opportunities.”
Summary thoughts on the Fortescue share price and FFI
Fortescue Future Industries is currently a small and new part of the business, but I think in the coming years it could become a much larger segment if it’s successful with some of its endeavours.
I do believe that the Fortescue share price is an interesting idea for the long-term, particularly with the iron ore price currently a lot lower than it was several months ago. I’d be happy to invest in a parcel of Fortescue shares today.
