Adelaide-based Leigh Creek Energy (LCK) this week said its board had made the final investment decision (FID) to proceed with Stage 1 of its Leigh Creek Energy Project (LCEP) in South Australia, some 550 kilometres north of Adelaide, where it plans to establish a 1 million mt/y urea facility utilizing in-situ gasification (ISG) technologies (GM Jan. 22, p. 1).
The Stage 1 commercial development of the project, which overlays the Leigh Creek coalfield, will comprise drilling of up to five initial gasification wells to provide feedstock syngas and the construction of a 5 MW power plant.
The company recently completed the project pre-feasibility study, and has been awarded a petroleum production license by the South Australian government for the commercial production.
“The FID milestone gives us approval to construct everything we need in Stage 1 of our commercial development plan of the LCEP and start earning revenue,” said LCK Managing Director Phil Staveley. “The company can now move ahead and build on the EPCM contracts and commencement works [announced earlier this year] and commence placing orders with suppliers for long-lead items and specialty process equipment items.”
In January, LCK awarded the upstream engineering, procurement, construction, and management (EPCM) contract to manage drilling services for the development of initial gasification wells to provide feedstock syngas for the power plant to Brisbane-based InGauge Energy Pty Ltd. The Downstream EPCM contract for the selection, engineering, construction, and commissioning of the 5 MW gas-fired power plant went to Prudentia Process Consulting Pty Ltd., also based in Brisbane.
LCK said initial costs for the Stage 1 commercial development will be funded using the company’s existing cash balance and finance facility.
Negotiation of purchase agreements, seismic work, planning, drilling, and power plant installation are currently scheduled for the remainder of calendar year 2021.
The Adelaide-based company has put the cost of the LCEP at US$2.6 billion, and said updates on the progress of Stage 1 will be given throughout the year with a view to estimating a completion date once planning is further progressed.
LCK also sees the potential to increase urea production capacity at the site to 2 million mt/y, using its 1,153PJ 2P gas reserves.