FARMERS are hopeful a planned urea plant in Victoria's LaTrobe Valley with an annual production capacity of 1.2 million tonnes will help ease the growing nitrogen crisis.
The plant will be built near the Loy Yang power station, Traralgon, and will convert brown coal into urea.
The Australian Energy Company (AEC), an unlisted company owned by chairman, Allan Blood, and several equity funds, hopes the $2 billion project will be up and running by 2012.
Urea is commonly made from gas but the AEC plant will use a gasification process pioneered in Germany to manufacture the urea from coal which will be dried before burning with a process regarded as a leader in "clean coal" technology.
It will use brown coal from the adjacent Loy Yang open cut mine.
The new plant will see Australia's urea production capacity increase by seven times. Currently Australia's only urea-manufacturing works in Queensland produces around 200,000 tonnes annually.
Australia now imports about 1.3 million tonnes of urea, valued at close to $900 million.
Mr Blood said the urea produced would be split between domestic use and export.
In financing the project Mr Blood said he was confident in getting a major multinational fertiliser business on board as a joint-venture partner.
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