Total
0
Shares
Leigh Creek Energy (ASX:LCK) - Managing Director, Phil Stavely (left)
Managing Director, Phil Stavely (left)
Source: The Transcontinental
Market Herald logo

Subscribe

Be the first with the news that moves the market
  • 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.

LCK by the numbers
More From The Market Herald
Sprintex (ASX:SIX) - Managing Director, Jay Upton

" Sprintex (ASX:SIX) to develop industrial air supply systems in China

Sprintex (SIX) has entered a three-year agreement with Nanjing RGE Membrane Tech (RGE) to develop and supply air supply systems used in China’s
Renergen (ASX:RLT) - Managing Director and CEO, Stefano Marani

" Renergen (ASX:RLT) improves revenue performance over half-year

Renergen (RLT) has improved its half-year revenue performance, bringing in R$1.2 million (A$108,000) in sales during the six-month period.

" Prominence Energy (ASX:PRM) hits main target at Bowsprit as drill rig slows

Prominence Energy (PRM) has encountered the main T2 target as drilling of Bowsprit-1, southeast of New Orleans in the US, nears total depth.

" Buru Energy (ASX:BRU) detects hydrocarbon shows in Rafael-1

Buru Energy (BRU) has drilled the Rafael-1 well in a 12¼-inch (311 millimetre) hole to the planned section depth of 3500 metres.