Leigh Creek is flying on news it can now produce commercial quantities of syngas
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Leigh Creek Energy’s shares took off on Tuesday after it told investors it has finally successfully produced commercial quantities of synthetic gas.
Shares soared over 57 per cent to an intraday peak of 14c.
Leigh Creek said it has now confirmed it can produce syngas of “sufficient quality and quantity” to support a commercial project.
The company has been testing a pilot plant which converts underground coal into gas, which it plans to turn into products like fertiliser. It had first gas from the plant in October.
The plant has now achieved a peak flow of 7.5 million cubic feet per day.
That equates to 2.7 billion cubic feet each year from just one chamber, but Leigh Creek plans to operate up to 20 chambers at any one time.
Managing director Phil Stavely said Leigh Creek has already started progressing the commercial arrangements for the project.
“The success of this trial has effectively unlocked a large energy resource of huge value and captured key data that validates the fact that this proven ISG [in situ gasification] technology can be successful in a commercial application,” he said.
Leigh Creek has received interest “multiple expressions of interest” from domestic and international energy and fertilizer companies.
The company is advancing talks with the interested parties in the hopes of striking a joint venture of partnership.
Leigh Creek says it now also has enough information to upgrade part of its large 2C resource to a 2P reserve.
A 2C resource is a best estimate of how much oil or gas is in a deposit. A 2P reserve means it’s proven and probable.