Leigh Creek Energy appoints PwC to manage debt funding for namesake urea project
Leigh Creek Energy will use an initial BFS on its urea operation, which is due in the current quarter to enable financiers to progress due diligence programs.
Emerging producer Leigh Creek Energy (ASX: LCK) has appointed PriceWaterhouseCoopers (PwC) to the role of strategic debt advisor for the development of its carbon neutral urea manufacturing facility in South Australia.
PwC will provide advice on securing funding for the project, from the selection of an appropriate investment bank through to final settlement.
Leigh Creek hopes the funding milestone will align with the release of an initial bankable feasibility study (BFS) before the end of the current quarter.
The study will be refined during the remaining period of front end engineering and design (FEED) work and updated to produce a final version before year end.
It is expected that the initial BFS will show a sufficiently compelling case for the project and enable banks to progress their due diligence programs in expectation of the final study.
Adding confidence
Leigh Creek managing director Phil Staveley said the appointment of PwC would add confidence to the significance of the flagship project.
“Adding PwC to our world-class team of consultants and contractors is a reflection of the size and quality of the underlying project,” he said.
“We believe it will provide further confidence to our investors and stakeholders that this project is moving rapidly towards construction.”
Low-cost, high-quality
The Leigh Creek urea project will develop low-cost, high-quality, nitrogen-based fertiliser for local and export agriculture markets using proprietary syngas (synthesis gas) technology.
Located 550 kilometres north of Adelaide, it will initially produce 1 million tonnes per annum of urea, with the potential to double capacity.
This week, Leigh Creek was awarded certification from the Australian government’s Climate Active initiative for the carbon neutral status of its urea development, achieved in the pre-production period by purchasing offsets from accredited international carbon farming projects.
Once in operation, the project will inherently be carbon neutral as most of the carbon dioxide it will produce will be used in the production of urea and any excess will be sequestered.
Long-term opportunities
Leigh Creek’s urea project will be one of the biggest infrastructure developments of its type in Australia, providing long-term economic development and employment opportunities for the communities of the Upper Spencer Gulf and northern Flinders Ranges regions and for the state as a whole.
It will be the only fully-integrated urea production facility in Australia, with all inputs for low carbon urea production contained onsite.