Leigh Creek Energy reports ‘exceptional’ environmental results at syngas demonstration

Junior gas developer Leigh Creek Energy (ASX: LCK) has announced “exceptional” environmental results from the ongoing pre-commercial demonstration at its Leigh Creek synthesis gas project in South Australia.

The company today updated the market with initial environmental monitoring data, confirming that the pre-commercial demonstration was “operating as expected, in line with scientific modelling”.

According to Leigh Creek Energy, the results support the company’s claim that the in situ gasification (ISG) process can be done in a “safe, regulated and controlled manner”.

It also endorses the project site, situated in the former Leigh Creek coalfields in northern SA, as being “ideally suited” to the ISG process.

What is ISG?

In situ gasification (ISG) is a chemical process that converts coal from its solid state into a gaseous form, creating synthesis gas, or ‘syngas’. The process is sometimes referred to as ‘underground coal gasification’ in other jurisdictions around the world.

In November, Leigh Creek Energy confirmed fertiliser production as the most “financially attractive” option to commercialise the Leigh Creek coalfield’s estimated 2,964 petajoules of 2C gas resources.

The company initiated the gasifier at its pre-commercial demonstration facility in early October and at the start of December, it reported being in the ‘pyrolysis stage’.

Leigh Creek Energy anticipates the operation will reach the commercial gas phase before the end of this month.

Suitable location

Leigh Creek Energy considers the former Leigh Creek coalfields as the “ideal” location for an ISG demonstration, due to the depths of the coal and the fact that the region has already been heavily impacted by historical coal mining.

In addition, the Leigh Creek coal has low permeability (meaning water does not pass through it easily), the risk of fractures and fissures is deemed low due to the density of the geology, and it sits in a basin with a confined hydrology.

“All the water that flows into the underground system sits in that basin and it doesn’t go anywhere, and that basin is not connected to any other regional groundwater resources,” Leigh Creek Energy head of investor relations Tony Lawry told Small Caps.

Under the company’s regulatory obligations, pressure and temperature monitoring data is required and made publicly accessible on the SA Department of Energy and Mines’ website.

According to Leigh Creek Energy, the environmental monitoring results are 100% in line with expectations. This includes no reported change in temperature in the ‘red zone’, which is a 15m radius surrounding the gasifier.

“Coal has very low thermal conductivity and it is unlikely that any significant change in temperature will be seen in the sensors in the coal seam during the PCD period,” the company stated.

The company also reported an observed decrease in pressure in this ‘red zone’ after ignition of the gasifier, noting that there appeared to be “inward flow towards the gasifier and no loss of containment”.

The ‘amber zone’, where sensors monitor a zone within a 100m radius of the gasifier, also showed a minor decrease in pressure as expected, and no change in temperature.

In addition, there was no reported change in pressure or temperature in the ‘green zone’, which is the area greater than 100m around the gasifier.

Once commercial syngas flows have been achieved, Leigh Creek Energy’s next goal is to convert a portion of its 2,964PJ 2C resource into proven and probable reserves.

The company is aiming to achieve this status during the first quarter of 2019.