Chinese and Australian authorities validate Leigh Creek Energy’s namesake asset

Leigh Creek Energy (ASX: LCK) has received endorsement from Chinese and Australian government agencies for its namesake project, which is one of the largest undeveloped and uncontracted gas reserves on Australia’s east coast.

Leigh Creek is developing an in-situ gasification operation in South Australia that effectively converts coal to its gaseous form.

In recognition of the project’s potential, the Australian Competition and Consumer Commission (ACCC) has sought Leigh Creek’s input for its inquiry into gas supply and transportation services to improve the transparency of Australia’s gas market.

Meanwhile, in China, Leigh Creek has been invited by the country’s Department of the National Reform and Development Commission to participate on a report on China’s energy strategy and emerging industries.

“Have in-situ gasification recognised as a National Strategic Emerging Industry is extremely important when considering Leigh Creek’s recent announcement of its heads of agreement with China New Energy Group,” the company stated.

Leigh Creek anticipates its input will be documented in the National Reform and Development Commission’s China Economic and Trade Herald periodical.

“We are now participating in the ACCC gas inquiry and look forward to providing our input to the ACCC,” Leigh Creek executive chairman Justyn Peters said.

He added the company was also looking forward to working with the China’s National Reform and Development Commission.

Focused on advancing Leigh Creek

The Leigh Creek Energy Project continues to be Leigh Creek’s major focus. This and the announcement of the heads of agreement with China New Energy are ancillary and secondary to the primary focus the company has in achieving commercial success with the project.

Earlier this month, Leigh Creek said it had concluded consultations with South Australian authorities and had developed a clear approval pathway to commercialising the project, which is the company’s number one priority.

Leigh Creek has completed decommissioning of its synthesis gas “syngas” pre-commercial demonstration plant in South Australia.

The company hailed the pilot a “great success” after it proved it could produce syngas via in-situ gasification at commercial levels.

The project’s 2C contingent resource has also been converted to a 2P (proven and probable) gas reserve of 1,153 petajoules.

Fuelling China’s hydrogen future

Under the heads of agreement with its largest shareholder China New Energy, Leigh Creek is looking to develop in-situ coal gasification in China to generate early cashflow.

The duo plans to produce syngas which contains 33% hydrogen and can be optimised to include 45% hydrogen.

During the pilot plant demonstration period, Leigh Creek indicated it could potentially produce 200,000t of hydrogen a year.

“Leigh Creek’s in-situ gasification process has proven that it has the potential to produce massive amounts of hydrogen as a standalone commodity,” Mr Peters said.

“The HoA with China National Energy is exciting as it presents a huge opportunity for Leigh Creek to move into such a large energy market in China,” Mr Peters said.

“China is a nation that is rich in large resources of stranded coal that are suitable for in-situ gasification.”

He added that China was also “rapidly moving” to a hydrogen economy and was investing billions into that new energy strategy.

The China Hydrogen Alliance predicts that by 2050, hydrogen will account for 10% of the country’s energy with demand hitting 60Mt.

Leigh Creek pointed out the importance of hydrogen in China’s energy mix cannot be “underestimated”.

By mid-afternoon trade, Leigh Creek’s shares were steady at $0.22.