Leigh Creek Energy to upgrade gas resource after syngas demonstration success

Leigh Creek Energy ASX LCK pre-commercial demonstration success ISG gasifier gas resource reserve
Leigh Creek Energy has achieved a peak flow of 7.5 million cubic feet of gas per day at its syngas demonstration plant in South Australia.

Hailing the pre-commercial demonstration of its syngas plant in South Australia a “great success”, Leigh Creek Energy (ASX: LCK) has now begun the process of upgrading its large gas resource to reserve status.

The junior gas developer emerged from a trading halt this morning to announce that successful production of commercial synthesis gas (syngas) has been achieved with a peak flow of 7.5 million cubic feet of gas per day.

According to the company, it has met the commercial objective of its pre-commercial demonstration facility, which was initiated late last year to prove the production of syngas via in-situ gasification (ISG) – the chemical process of converting coal to a gaseous form.

Most importantly, the data gained from the operation means Leigh Creek now has sufficient information to upgrade a significant portion of its contingent resources to a bankable 2P (proven) reserve.

The company’s namesake energy project, located at the Leigh Creek coalfields in northern SA, currently has a 2C resource of 2,964 petajoules of gas, which represents about 7.8% of Australia’s east coast resources.

“The success of this trial has effectively unlocked a large energy resource of huge value and captured key data that validates the fact that this proven ISG technology can be successful in a commercial application,” Leigh Creek managing director Phil Staveley said.

He added that upgrading a portion of the company’s resource to a reserve would be a significant step forward in providing gas to the Australian energy market.

“These are significant milestones for our company but also for a gas industry in crisis,” he said.

“We are already progressing with the commercial arrangements for our project,” Mr Staveley added.

Demonstration outcomes

In Leigh Creek’s latest update, it said the pre-commercial demonstration confirmed the produced syngas is of “sufficient quality and quantity” to support a commercial project.

The recorded peak flow of 7.5MMcf/day works out to be 2.7 billion cubic feet per year from just one chamber. This far exceeds the stated goal of the pre-commercial demonstration, which was to produce syngas at more than 1MMcf/day.

The company is planning to operate up to 20 or more chambers at any one time.

The demonstration also consistently produced all of its targeted commercial gases – carbon monoxide, methane, nitrogen and hydrogen – and achieved one of the highest syngas heating values in the world.

In addition, the facility continued to operate with no reportable environmental or safety incidents.

Danica has extensive experience writing and editing business news in the Oceanic and Southeast Asian regions. She has written across a range of industries including oil and gas, mining, energy, science and research, retail and travel. Danica has covered small and large cap companies listed on the Australian, Singapore, Hong Kong, Indian, London and Toronto exchanges.