Leigh Creek Energy Ltd (ASX:LCK) has acquired Siemens power generators from Drivetrain Australia to supply power for the Stage 1 upstream commercialisation of the Leigh Creek Energy Project (LCEP).
The generators are the first long-lead production infrastructure items procured and will be installed and tested on-site ready to receive the first syngas from production wells in 2022.
Stage 1 upstream of the LCEP will focus on developing the gasifiers required for the development of the zero-carbon one million tonnes per annum urea plant at the LCEP.
Key to stage 1 upstream operations
LCK managing director Phil Staveley said: “After achieving the required regulatory and financial milestones, it’s rewarding to now be preparing for building major infrastructure on-site for commercialisation of the $2.6 billion Leigh Creek Energy Project.
“The syngas fired power generators sets are key to Stage 1 upstream operation.”
Stage 1 upstream commercialisation milestones
The main objective of the project’s Stage 1 upstream is to develop the gasifiers for the urea manufacturing plant for the Stage 2 requirements in an environmentally responsible manner.
The scope of this stage includes:
- Acquisition and installation of the power generators;
- Drilling up to five syngas-producing wells to provide syngas to power the generators; and
- Acquisition of additional 3D seismic information to guide the planning of the gasification field for stage 2 syngas feedstock requirements.
Drivetrain Australia expects Siemens engines to arrive from Spain in early 2022, which aligns with LCK’s plans to install them onsite and commence syngas production in 2022.
Low-cost supplier of urea
LCEP is expected to provide urea to the Australian and regional markets with initial studies indicating an NPV of the project of around $3.4 billion with a 30% IRR.
Staveley added: “The LCEP will be the only fully integrated urea production facility in Australia, allowing us to be the lowest-cost sovereign supplier of this critical product for the agricultural sector.
“It will change the dynamics of the local and Asian fertiliser markets and ensure the Australian agricultural sector is provided with a key input that is cheap, secure, reliable and produced with zero carbon emissions.
“We continue to ensure we meet shareholder and community expectations, working under the values of the United Nations Global Compact to ensure we meet the highest standards for safe and reliable operations throughout the construction and operational life of the project.”