Leigh Creek Energy Limited has kick-started the construction of a urea fertilizer plant based on the Leigh Creek coal deposits in South Australia.
The company told investors it had entered into a binding heads of agreement with South Korean engineering and construction firm DL E&C Co. Ltd for a feasibility study, engineering design and procurement stages for the project in the mid-north of the state.
Following finalisation of the terms of the agreement the DL Group will become engineering, procurement, construction and commissioning contractor for the project.
The Korean company will arrange the required finance for the turnkey price of the urea manufacturing facility mainly with Korean institutions.
Leigh Creek managing director Phil Staveley said the agreement was a major milestone for the project, which will in situ gasify the coal deposits formerly used for electricity generation.
“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.”
Leigh Creek plans initial production of one million tonnes a year of urea with scope to double output.
The resulting nitrogen-based fertiliser will be sold on local and international markets.
“The $2 billion LCEP (Leigh Creek Energy Project) will be one of the biggest infrastructure projects of its type in Australia, providing long term economic development and employment opportunities for the communities of the Upper Spencer Gulf region, northern Flinders Ranges and South Australia.
“The LCEP will be the only fully integrated urea production facility in Australia, with all inputs for low-carbon urea production on site.”
The company envisages nominal operating costs to be $109 per tonne, in the lowest quartile of the global urea production sector.
Leigh Creek said the facility would be carbon neutral by 2030.
Picture: Leigh Creek pilot plant
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