Leigh Creek gets into rentals, hires out its syngas pilot plant to imitators
Leigh Creek Energy has found a way to tide the budget over until the day its synthetic gas plant launches: by renting out its pilot plant.
The company (ASX:LCK) will rent its syngas pilot plant — once its own pilot converting underground coal into gas is done — to South African based African Carbon Energy to use at its Theunissen underground coal gasification project.
It gives the South Africans an option to buy if they want.
Leigh Creek says the deal, which is still only a heads of agreement at this stage, will cover all of their engineering and plant costs for the pilot if the South Africans choose to lease and also buy the plant, which is “in excess of $10m”, according to managing director Phil Staveley.
About three other companies from as far afield as North America and China are also interested.
“The [pilot plant] has to be taken away at the end of its operation so we have to do rehabilitation,” Mr Stavely told Stockhead.
“We designed it on skids with the thought that people might be interested. Now people are really seeing us as being world leaders in science so they’re knocking on our door.”
The pilot plant is currently set up at Leigh Creek’s South Australia site where it plans to turn the gas into fertiliser.
The plant started running in October but the 90-day trial doesn’t start until they begin producing commercial quantities of gas.
Mr Staveley says the trial start is about a month away.
As of last week they’d managed to deliver 13 days of “high quality” gas.
The need to find a revenue stream is critical, as a full commercial plant is two to four years away. Mr Stavely says it’ll be built by 2024 “at the latest”.
Leigh Creek is currently raising a total of $5.14m to add to the $11.7m taken in June and July last year.
The company’s stock rose almost 5 per cent when the market opened to 11c.