High gas prices have been blamed for the closure of a Queensland fertiliser plant. 

Incitec Pivot says it has “reluctantly” been forced to shut its Gibson Island fertiliser plant, near Brisbane, because affordable gas is not available. The plant converts gas into fertiliser products such as ammonia and urea.

The closure is set to occur by December 2022, in a move that will affect 170 jobs.

Incitec has regularly threatened to close the plant over the last five years, but has so far kept it open to take advantage of deals from gas producers and taxpayers.

The latest closure threat comes barely six months before a federal election, and amid a surge in gas prices both domestically and in Asian export markets.

“It is disappointing for our people and Australian manufacturing that we could not reach a suitable commercial gas supply agreement to continue the operation of the Gibson Island facility from processing natural gas. However, we look to create new opportunities aligned to the company’s forward strategy,” Incitec chief Jeanne Johns says.

“We will be offering our people whatever assistance we can, including redeployment opportunities where possible.”

Incitec is reportedly working with Fortescue Metals Group to look at whether Gibson Island can be repurposed to produce green ammonia.