- Leigh Creek Energy (LCK) taps DL E&C Co. as the engineering, procurement, construction, commissioning and finance contractor for its new urea production plant in SA
- The facility forms part of the Leigh Creek Energy Project, reportedly the world’s first large-scale fertiliser project with zero carbon emissions
- A major South Korean bank has issued a letter of support, offering debt financing of up to 70 per cent or around $1.5 billion, of the stage two project costs
- DL E&C Co. will complete a bankable feasibility study and front-end design and engineering stages ahead of a final investment decision in late 2022
- Shares have opened 10 per cent higher on the market at 16.5 cents at 10:27 am AEST
Leigh Creek Energy (LCK) has awarded South Korea’s DL E&C Co. the engineering, procurement, construction, commissioning and finance (EPCCF) contract for its one-million-tonne-per-annum urea production plant.
The contract covers development of the commercial stage of the Leigh Creek Energy Project, comprising the company’s zero carbon urea facility in South Australia, which LCK claims will be the first of its scale in the world.
Notably, a major South Korean bank has issued a letter of support, offering debt financing for up to 70 per cent or around $1.5 billion of the stage two project costs.
Key terms of the agreement also allow for the involvement of other multi-national banks, with the remaining 30 per cent to be funded by a mixture of debt and equity.
Additionally, under the deal, DL E&C Co. will manage the project’s bankable feasibility study and front-end engineering and design (FEED) stages, ahead of the final investment decision.
Once a decision has been achieved and all relevant documentation finalised, the contractor will then perform the EPCCF activities for the urea facility.
Leigh Creek Energy Managing Director Phil Staveley said the company had not just engaged DL E&C Co. as a contractor but as a partner.
“Having a partner such as DL E&C for the project provides us with confidence in delivering the best outcome for the project, for the stakeholders and for our supportive shareholders,” he said.
“Awarding the stage two construction contract moves the Leigh Creek project another major step closer to developing our large resource base in South Australia to be a leading supplier of urea to international markets and the Australian agriculture sector, removing many of the supply risks that currently impact Australia’s farmers, such as commodity price and exchange rate risks and timing.”
Looking ahead, DL E&C Co. will make an immediate start on the bankable feasibility study and FEED stages, ahead of a final investment decision in late 2022.
On Thursday, shares opened 10 per cent higher on the market at 16.5 cents at 10:27 am AEST.