- Leigh Creek Energy has signed a Heads of Agreement (HoA) to commence In-Situ Gasification (ISG) in China with China New Energy
- Under the HoA Leigh Creek will begin ISG operations in China producing hydrogen and potentially fertiliser
- The company has also announced it is informal discussions with Shanghai International Energy Exchange
Leigh Creek Energy has signed a Heads of Agreement (HoA) to commence In-Situ Gasification (ISG) in China with China New Energy.
China New Energy was established to partner with overseas companies with demonstrated growth prospects. It has been the major shareholder in Leigh Creek since 2017.
From the first investment into the company, China New Energy knew there was an opportunity for taking Leigh Creek’s ISG process to China.
Under the HoA Leigh Creek will begin ISG operations in China producing hydrogen and potentially fertiliser.
The HoA will help establish a Joint Venture (JV) agreement between the companies which is expected to be signed by the end of the year.
China New Energy has commercial interests in large underground coal resources in Shanxi, which plans to develop under the JV.
The agreement does not stop Leigh Creek from providing services to other Chinese companies.
The ISG process converts coal, through a series of chemical reactions, from its solid state into a gaseous form.
According to the announcement it is forecast by 2020 that 72 billion m3 of hydrogen will be used as energy and the gross industrial output value of the industry will reach RMB $300 billion (US$44.4 billion).
China New Energy is a British Virgin Islands incorporated company based in Hong Kong with large asset holdings in mainland China. It holds 24.24 per cent of shares in Leigh Creek.
The company also announced it is informal discussions with Shanghai International Energy Exchange. This will allow New Energy and Leigh Creek to directly trade its gas on the exchange.
Leigh Creek Energy Limited is an emerging energy company focused on developing its Leigh Creek Energy Project located in South Australia.
Leigh Creek Chairman Justyn Peters is pleased with the agreement.
“This agreement is exciting as it presents a huge opportunity for LCK to move into such a large energy market as China and it is my pleasure to be able to share this news with our shareholders. This HoA also gives us an opportunity for a quicker path to revenue,” he said.