2017: Heating up underground at Leigh Creek

With the potential to bring more that 3000 PJ of gas to the Australian market, the Leigh Creek Energy Project is quickly warming up. The first in Australia to utilise in situ gasification (ISG) processes, the Project will be one of Australia’s largest land-based gas developments.

Initial planning for the Leigh Creek Energy Project (LCEP) began back in 2011, when Leigh Creek Energy (LCK) was still an identifier and facilitator of resource development project opportunities. LCK became the developer of the project after close analysis convinced the company of its potential to produce commercial quantities of syngas.

Syngas, or synthesis gas, is a composite gas composed predominantly of methane, carbon dioxide, carbon monoxide, nitrogen and hydrogen; it can be used for pipeline quality natural gas, electricity generation and ammonium nitrate products.

“This will be the first time that a resource of this size has been commercialised via ISG in an advanced western economy,” said Leigh Creek CEO Phil Stavely.

Scope of works

LCK is developing plans to construct and operate a gas plant at the site of the former Leigh Creek Coalfield in South Australia.

The first phase of the process is the successful operation of a Pre-Commercial Demonstration (PCD) facility at the site, with the objective of demonstrating that syngas can be produced within regulatory guidelines and stakeholder expectations.

Once the commercial facility starts to produce gas, it is envisioned that it will be transported via a new pipeline to access the east coast gas network.

“I would expect a pipeline probably going across to the Moomba-Adelaide Pipeline System. There are a number of options,” said Mr Stavely.

LCK has a Heads of Agreement with APT Pipelines Limited, a subsidiary of APA Group, to develop places for the infrastructure including the most likely route for the pipeline.

Additionally, it is envisioned that the gas will be used in a new gas-fired power station and eventually for the production of ammonium nitrate, which can be used in industrial explosives or fertiliser.

The gas reserves of the LCEP have been independently certified at almost 3000 PJ of gas, an enormous amount comprising 2 per cent of Australia’s identified gas resources.

PCD is scheduled for initiation in the fourth quarter of 2017 with the balance of construction to be underway by July with plans to make demonstration gas later this year. After this, LCK plans to begin construction of a commercial plant to be operational by 2019-20.

In situ gasification

In situ gasification, ‘in situ’ meaning ‘in position’, occurs when coal is heated underground and altered from its solid state into syngas.

The chamber is formed within the coal itself, with the rock above forming the roof of the ISG chamber. After the coal is heated, oxygen is then injected from surface facilities through the Injection Well into the ISG chamber to commence and then maintain the gasification process.

ISG has many advantages, including utilising the natural environment of deep coal, low capital and operating costs, and the ability to extract energy from coal too deep or uneconomic to mine. It’s also an efficient process with a small physical footprint for large amounts of energy extraction, producing less greenhouse gas than conventional mining.

Why is the project being constructed?

This project is one of the largest land-based gas developments in Australia, and will give the LCEP a lifespan of 30 years or more at a time when the gas reserves around Australia are becoming increasingly critical.

One of the problems that is being overcome during this project is development of deep coal resources that are unable to be accessed by open-cut mining. LCK will use in-situ gasification to target deep and stranded coal reserves that cannot be accessed through traditional mining techniques.

“Leigh Creek coal seams are a sort of bowl or ‘U’ shaped, so where it meets the surface it has been subject to open-cut coal mining for 50 or 60 years,” said Mr Stavely

“But the deeper coal is just not economically available, so that’s where this opportunity arises.”

The Leigh Creek Coalfield is an ideal location for the development of an ISG project, the first of its kind in Australia. It’s located close to a major gas pipeline and already has significant infrastructure, including mining facilities, sealed roads, a fully serviced town, water and communications.

It also has a large enough coal reserve to support commercial ISG operations, as well as having ideal geological conditions to accommodate the ISG process. These conditions include thick impervious seal rock both above and below the coal seam, no aquifers near operational areas, thick seams of suitable coal and minimal rock fractures.

Impacts of the project

LCK anticipates that anywhere from 800 to 1000 people will be involved in the construction of the commercial facility, and is also eager to engage companies based in the upper Spencer Gulf and far north South Australia.

LCK currently has around 30 employees, with about half of the workforce regularly visiting the site. Once in operation, there will being approximately 150-200 staff employed between the Leigh Creek facility and the head office in Adelaide.

A major project for South Australia, the LCEP will deliver significant and long term benefits in the form of jobs and royalties.

By developing the deep, stranded and otherwise unusable coal, the project will deliver a major new energy source, adding to South Australia’s already enviable reputation in the industry.

What comes next?

LCK recently completed a capital raise of $22 million for the PCD stage of the project. During this stage, LCK has undertaken cultural heritage surveys as directed by the Traditional Owners, the Adnyamathanha Traditional Lands Association, and upon receiving site clearance has been undertaking site characterisation studies.

With the funding successfully completed for this stage, LCK are eager to accelerate the development of the PCD throughout the rest of year , and has awarded early lead construction and equipment contracts for the PCD to major Australian companies

Combustion and specialist engineering Gasco Pty Ltd was awarded the thermal oxidiser and cold vent supply package, while ABB Australia won the contracts for supply of the gas analyser and gas instruments.

“We completed our funding at the end of March,” said Mr Stavely.

“Tranche 1 was done a few days ahead of time. Tranche 2 was completed in May, three weeks ahead of time, with China New Energy.

“So we’ve got funding in place and we’re all working tirelessly to make sure we bring this thing (PCD) home in December.”

This article was featured in the July 2017 edition of The Australian Pipeliner

If you have news you would like featured in The Australian Pipeliner contact Managing Editor David Convery at dconvery@gs-press.com.au

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