Oil and Gas News

Leigh Creek extends time frame with South Korean engineering company

Leigh Creek Energy (LCK) and South Korean engineering and construction company DL E&C have agreed to extend the period for a large scope of work for its South Australian flagship project.

The binding heads of agreement (HoA) is to negotiate with DL E&C for the feasibility study, front-end engineering and design (FEED) and engineering, procurement, construction and commissioning (EPCC) for the Leigh Creek Energy project (LCEP), which has been extended until June 30, 2021.

The HoA executed by DL E&C and LCK outlines the principals for the feasibility study, FEED, EPCC and financing arrangements for LCK’s urea manufacturing facility to be included in the final agreement.

LCK has advised that the primary agreed principals for the agreement include: DL E&C managing the LCEP feasibility study and FEED for final investment decision (FID).

Once FID is made, DL E&C will lead engineering and construction of the ammonia and urea production infrastructure.

The company further outlined that under the agreement, DL E&C with LCK’s assistance, will arrange the required finance for the turnkey price of the urea manufacturing facility.

Following the agreement being finalised, LCK will retain 100 per cent ownership of LCEP.

LCK managing director Phil Staveley said the time frame for the progression of the HoA has been extended due to the impact of COVID-related international travel restrictions.

“Both LCK and the DL E&C team in South Korea remain committed to delivering a robust agreement for turnkey construction of a first class urea production facility,” he said.

Located in South Australia, 550 kilometres north of Adelaide, the LCEP will initially produce 1Mtpa (with potential to increase to 2Mtpa) of urea using LCK’s 1,153PJ 2P gas reserves.