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.
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.