Adelaide-based Leigh Creek Energy (LCK) has awarded the contract for the development of the full commercial stage (Stage 2) of its Leigh Creek Energy Project (LCEP) in South Australia to South Korean engineering and construction company DL E&C Co. Ltd., Bloomberg reported.
LCK plans to establish a 1 million mt/y urea facility utilizing in-situ gasification (ISG) at LCEP, located some 550 kilometers north of Adelaide and overlaying the Leigh Creek coalfield (GM Jan. 22, p. 1).
A letter of support from a major South Korean bank has been issued to provide debt finance for up to 70 percent, or about A$1.5 billion (approximately US$1.13 billion at current exchange rates) of the Stage 2 project costs.
DL E&C will make an immediate start on the Bankable Feasibility Study for LCEP, and will manage the front-end engineering and design (FEED) stages, with a Final Investment Decision expected in late 2022, according to the report.
Following a favorable FID, the South Korean contractor will then perform the EPCCF activities for the urea production plant
LCK and DL E&C inked a binding Heads of Agreement in early May to exclusively negotiate the terms of a proposed agreement for the feasibility study, front end engineering and design (FEED) stages, and engineering, procurement, construction, and commissioning (EPCC) for the project (GM May 7, p. 43).
LCK’s Board in March gave the green light for the Stage 1 commercial development of the LCEP. This Stage 1 comprises drilling of up to five initial gasification wells to provide feedstock syngas and the construction of a 5 MW power plant (GM March 19, p. 1).