A major milestone for Leigh Creek Energy project

Leigh Creek Energy Ltd’s (LCK) Leigh Creek Energy Project (LCEP), located in South Australia, is continuing to develop. LCK has signed a non-binding heads of agreement (HOA) with APT Pipelines Ltd, a subsidiary of APA Group, for a gas pipeline connection, marking a key milestone in infrastructure development for the LCEP.

This agreement will allow the development and conceptual plans for the interconnection of the LCEP with the east coast gas markets.

The LCEP will produce high value products, such as methane and fertiliser, from the remnant coal resources at Leigh Creek through the use of in-situ gasification technologies. LCK intends for the project to provide long-term growth and opportunities to the communities of the northern Flinders Ranges and South Australia.

The HOA will be effective for the duration of at least six months to up to two years. It covers the following:

• The development of conceptual plans for the interconnection of LCEP to the Eastern Australia gas markets.
• Identifying the most likely route for the interconnection pipeline.
• Reviewing the transport charges to deliver gas to market.
• Reviewing the gas storage potential at the LCEP.
• Reviewing other infrastructure opportunities including power generation.

Under the HOA, LCK and APA will work together to:

• Develop conceptual plans for the interconnection of LCEP to the eastern Australian gas markets.
• Identify the most likely route for the interconnection pipeline.
• Review the transport charges to deliver gas to market.
• Review the gas storage potential at the LCEP.
• Review other infrastructure opportunities including power generation.

The scope and timing of the studies fall within the LCEP deadlines required to be met in order to reach initial gas flaring in 2016 and commercial production in 2019.

According to LCK, working with Tier 1 partners and service providers is a necessary part of the company’s strategy to pursue multiple funding opportunities with the ultimate intention of both reducing risk and enhancing shareholder returns. APA was the preferred operator in the areas that are the subject of this HOA.

Peters Chairman of LCK, commented: “With this HOA, LCK continues to meet its goals and deliver on its broader strategy. This is an exciting, and important, milestone in the development of the Leigh Creek Energy Project. Beyond the obvious operational progress, we are excited to be working with Australia’s largest natural gas infrastructure operator on how to best bring our gas to market and provide an additional source of gas to the supply constrained east coast gas market. This HOA will help accelerate the LCEP development timetable and provide added confidence to domestic buyers of gas and investors in LCK. In addition to this development, the project development team has delivered the JORC compliant coal resource and is aiming to provide the gas certification results by the end of this year, which will complete a further milestone in the development of the LCEP.”

Edited from press release by Harleigh Hobbs

Read the article online at: https://www.worldcoal.com/coal/18122015/a-major-milestone-for-leigh-creek-energy-project-3314/