The Strike Energy Ltd (ASX: STX) share price is rocketing higher on news its Project Haber has received major support from state and federal governments.
The project's potential as a domestic urea manufacturer has seen it awarded Lead Agency Status from the Western Australian government. At the same time, the federal government has provided it with a $2 million grant as part of its Supply Chain Resilience Initiative.
At the time of writing, the Strike Energy share price is 19.5 cents, 8.33% higher than its previous close.
Let's take a closer look at today's news from the oil and gas explorer and developer.
Strike Energy share price surges on Wednesday
The Strike Energy share price is in the green as its Project Haber is recognised for its importance to the Australian economy.
The news is timely given Australia is on track to run out of AdBlue, of which urea is a major ingredient, in a matter of weeks.
The shortage has been born from the ongoing energy crisis in the northern hemisphere, which has seen energy diverted from urea manufacturing to provide heating and power.
Subsequent export restrictions on urea have boosted the Middle East urea spot price to more than US$1,000 a tonne.
Additionally, Australia's only urea production facility, run by Incitec Pivot Ltd (ASX: IPL), is due to close next year.
According to Strike, losing Australian urea production will leave the country reliant on imports from the Middle East and China. As a result, farmers will be exposed to international market conditions.
The Western Australian government's recognition of Project Haber sees it assigned a case manager.
That manager will assist in its tracking and approvals management and interagency coordination.
Further, the Western Australian mid-west is set to be home to "hydrogen hubs" following a push from the state's government.
That could see $117.5 million of funding – which the Commonwealth Government might match – funnelled to the region.
Project Haber is set to be one of Australia's largest hydrogen-consuming facilities. Thus, it could be strategically important to the local hydrogen economy.
What did management say?
Strike Energy CEO and managing director Stuart Nicholls commented on the news driving the company's share price today:
The award of this Supply Chain Resilience grant and West Australian Lead Agency Status is recognition of the importance of Strike's pursuits at Project Haber, to not only domesticate the nitrogen fertiliser industry but also dramatically reduce the carbon footprint of the Australia's agricultural emissions.
News from South Erregulla
Potentially also sending the Strike Energy share price higher today is news of the company's South Erregulla gas field.
The company has begun mobilising equipment to the field to start drilling the South Erregulla-1 (SE-1) well.
The primary objective of the well is to delineate around 350 petajoules of high confidence resource. Doing so should secure the gas requirements for Project Haber from Strike's permits.
That gas feedstock could also let the company progress banking and equity processes with gas to cover the tenor of any debt facilities.
