Leigh Creek Energy - Governments' recognition of LCEP and 2P reserves.
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Release date- 29082019 - Leigh Creek Energy Limited ('LCK', or 'the Company') announces that its large 2P gas reserve, and progress advancing the commercialisation stages of the Leigh Creek Energy project ('LCEP'), have recently been acknowledged by two high level, government agencies in Australia and China.
Acknowledgement by internationally recognised federal government agencies represents significant third party validation of LCK's technology, project and corporate operations and pathway to monetising the largest uncontracted 2P gas reserve available to the east coast of Australia.
ACCC issues notice under section 95ZK of the Competition and Consumer Act 2010
LCK welcomes its inclusion in the inquiry on gas by ACCC.
The Chair of the Australian Competition and Consumer Commission (ACCC) has recently issued LCK a notice under section 95ZK of the Competition and Consumer Act 2010 (Cth) (CCA). The Notice relates to the ACCC's inquiry into the supply of, and demand for, gas supply and gas transportation services, and measures to improve the transparency of gas supply arrangements in Australia. LCK looks forward to supplying the information requested and cooperating with ACCC to improve transparency in the Australian Gas Market.
The National Reform and Development Commission
Following LCK's announcement on 13 August 2019 of a binding Heads of Agreement (HoA) with China New Energy Group Limited (CNE), the Company is honoured to have been invited by a Department of the National Reform and Development Commission (NRDC) to participate in the China Development Report on the National Strategy of Emerging Industries. Having In-Situ gasification ('ISG') recognised as a National Strategic Emerging Industry is extremely important when considering LCK's recent announcement of its HoA with CNE.
This engagement will be ultimately documented in the China Economic and Trade Herald, a periodical of the NRDC (formerly State Planning Commission and State Development Planning Commission), and is seen as 'a reference book for development and reform' and 'a compass for economic work' within China.
The importance of hydrogen in the energy mix in China cannot be underestimated. It is anticipated that between 2020 to 2025, the expected industrial output of the hydrogen industry will be RMB 1,000bn (US$148bn) and it is anticipated that there will be 50,000 fuel cell vehicles running in China, served by 200 refilling stations (White Book on the China Hydrogen Energy and Fuel Cell Industry). Given that LCK's pre-commercial demonstration indicated potential production of 200,000 tonnes of hydrogen per year, LCK is ideally placed to take advantage to contribute to the rapidly developing hydrogen economy and ultimately use its technology for the production syngas and hydrogen.
Continuation with domestic operations
The LCEP continues to be LCK's major focus.
This and the announcement of the HoA with CNE are ancillary and secondary to the primary focus LCK has in achieving commercial success with the LCEP. The progress LCK is making in China supports LCK's flagship project at Leigh Creek. The invitation to participate in China's hydrogen economy and acknowledgment by influential agencies in China enables and assists LCK to secure long term partners and funding for the LCEP.
These developments represent months of conversations and negotiations that followed the successful production of commercial quality and quantities of gas at the demonstration facility at Leigh Creek. It is no coincidence that LCK's progress in China has immediately followed the announcement of moving towards commercial production, and that LCK has been able to report no environmental impact or safety concerns nearly 1 year after it first produced gas.
Achieving a significant revenue stream before we commence production of gas in South Australia has been a long-held objective of LCK. The first opportunity for revenue is being commissioned by Chinese coal companies to evaluate coal resources that are suitable for ISG. After the evaluation and locating suitable ISG projects we will enter into negotiations in being the operator and/or being a joint venture partner.
Shareholders can expect more announcements in the near future as LCK move towards securing revenue streams from China operations and provide more information regarding domestic operations of which negotiations are continuing.
Executive Chairman's comments
LCK Executive Chairman Justyn Peters stated: 'We are now participating in the ACCC gas inquiry and look forward to providing our input to the ACCC. We look forward to progressing with CNE and working with the National Reform and Development Commission while remaining focused on our flagship project in South Australia.'
'The HoA with CNE is exciting as it presents a huge opportunity for LCK to move into such a large energy market in China. China is a nation that is rich in large resources of stranded coal that are suitable for ISG. China is also rapidly moving to a 'Hydrogen Economy' and is spending billions of dollars on that new energy strategy.'
'Leigh Creek's ISG process has proven that it has the potential to produce massive amounts of hydrogen as a standalone commodity. Since that announcement only one week ago, we have been recognised by the significantly influential National Reform and Development Commission as a strategic partner focussing on Hydrogen production in China.'
Tel: +61 412 467 160
About Leigh Creek Energy
Leigh Creek Energy Limited is an emerging energy company focused on developing its Leigh Creek Energy Project (LCEP), located in South Australia. The LCEP will produce synthetic natural gas and/or ammonium nitrate products (fertiliser and industrial explosives) from the remnant coal resources at Leigh Creek, utilising In Situ Gasification technologies, and will provide long term stability and economic development opportunities to the communities of the Upper Spencer Gulf, northern Flinders Ranges and South Australia. The Company is committed to developing the LCEP using a best practice approach to mitigate the technical, environmental and financial project risks.
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