Leigh Creek Energy (LCK) has signed an agreement with South Korean engineering and construction company DL E&C 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).
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 HoA is a milestone for the company.
“We have chosen DL E&C from a pool of contenders as we are confident that they can deliver a first class urea production facility which will employ the latest innovative technology and that they will be a reliable partner,” he said.
“Construction of the LCEP plant will create thousands of South Australian jobs during construction, commissioning and operation.”
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.