- Leigh Creek Energy (LCK) has been issued a petroleum production licence and an associated activities licence by the South Australian Government
- These licences will allow the company to accelerate the development of its namesake project in South Australia
- Leigh Creek is positioning its project to become Australia’s largest in-situ gasification project as well as a key supplier of low-cost urea, which is a key fertiliser in the agricultural sector
- The activities licence permits Leigh Creek to access roads and infrastructure to conduct operations
- A further vote of confidence is the recent pre-feasibility study, which outlined a pre-tax net present value is $3.4 billion
- Company shares are up 10.8 per cent and trading at 20.5 cents
Leigh Creek Energy (LCK) has been issued a petroleum production licence (PPL) and an associated activities licence (AAL) by the South Australian Government.
These licences will enable the company to progress development activities at its namesake project.
The Leigh Creek Energy Project is located 550 kilometres north of Adelaide, South Australia. It has proved and probable 2P reserves of 1153 petajoules of gas from 31 per cent of the coal at Leigh Creek.
The company wants the project to become the largest in-situ gasification (ISG) project in Australia, as well as a significant supplier of low-cost urea for the agricultural sector.
Leigh Creek’s project will generate synthesis gas (syngas) from deep coal seams using its gasification technology. The syngas will then be used as a feedstock to produce urea — a key fertiliser in the agriculture industry.
The PPL marks the final petroleum licencing approval and provides Leigh Creek with a sense of certainty that its project will become the only fully-integrated fertiliser project in Australia.
“The granting of the PPL by the South Australian Government allows us to proceed with certainty towards monetising the large gas reserves of the LCEP and providing long-term economic development opportunities to communities of the Upper Spencer Gulf, northern Flinders Ranges, South Australia and Australia,” Managing Director Phil Stavely said.
The AAL sits adjacent to the PPL’s boundaries. Now, the company is permitted to access the AAL area to conduct operations that will support the production of petroleum products. Operations include the acquisition of 2D and 3D seismic surveys, well drilling, monitoring existing wells and using other existing infrastructure.
Leigh Creek recently completed its pre-feasibility study, which confirmed compelling project economics. It outlined an average operating cost of $109 per tonne which is favourable to the volume-weighted average global urea production cost of $268 per tonne.
Pre-tax net present value (NPV) is $3.4 billion, with an internal rate of return (IRR) of 30 per cent. The estimated total capital cost is $2.6 billion.
Leigh Creek is focused on progressing environmental reports for the operation and expects to begin commercial ISG production within the next two years.
Company shares are up 10.8 per cent and trading at 20.5 cents in early morning trade.