South Australia is on the verge of achieving two key milestones in which the old Leigh Creek coalfield will be used to deliver a fresh source of gas and energy products into the national power grid.
Addressing the second day today of the two day Paydirt 2018 South Australian Resources and Energy Investment Conference in Adelaide, Leigh Creek Energy Managing Director, Mr Phil Staveley, said the Company is on track to commence this quarter, a pre-commercial demonstration of its in situ gasification (ISG) demonstration plant under construction currently on the former coal mine site.
Subject to a positive outcome of the planned 60-90 day demonstration trial to produce syngas, this should lead to an anticipated upgrade to reserve, of the project's 2C unconventional gas resource.
The demonstration plant includes the construction of an above ground plant and the establishment of a below ground single ISG gasifier chamber. The demonstration plant will be commissioned and operated for a short period (approximately 2-3 months) to produce syngas, so that the technical and environmental performance of the process can be analysed.
The Company's flagship Leigh Creek project has an estimated resource of 2,964 petajoules (PJ) – equivalent to about 7.8% of the east coast's 2C gas resources of 38,600PJ and delivering a potential 30 year plus life. Its syngas can be converted into power, natural gas, petrochemical and agricultural products.
“We have recently secured the key environmental approval for the demonstration to go ahead and that has substantially derisked the test schedule,” Mr Staveley said.
“The pre-commercial demonstration will commence shortly from what is arguably the best ISG site in the world,” he said.
“It has the correct geological setting, and we are deploying industry best practices to ensure Leigh Creek remains one of the world's most low risk ISG commercial operations,” Mr Staveley said.
Leigh Creek Energy is looking to final feasibility, approvals, FEED and offtake conclusions through calendar 2019 to facilitate a Final Investment Decision and start to construction of the project's main power station, in 2020.
The information gained from the Demonstration will be used in LCK's feasibility studies for the commercial phase of the project.
For the Demonstration Project, the ISG configuration will consist of two wells drilled into a deep coal seam over 500m below the surface, one for an inlet well for the addition of air and water, and the other for the outlet well for the extraction of synthesis gas (syngas).
A combination of one horizontal well and one vertical well will be used for the demonstration plant gasifier to create a direct linked system in which the two wells meet. Hydraulic fracturing (fracking), a well stimulation technique in which rock is fractured by a pressurised liquid, will not be used to connect the inlet and outlet wells.
The inlet and outlet wells have been designed to meet international petroleum industry standards for the pressures, temperatures, operational stresses and loads that will occur during operation of the gasifier.
The Demonstration Project is regulated as an exploration activity under the Petroleum and Geothermal Energy Act 2000and as an exploration activity the syngas produced is unable to be sold for commercial use, and will therefore be treated on site in a thermal oxidiser as part of the process.