Leigh Creek Energy shares jump after key gas production approval granted for site in SA’s far North

LEIGH Creek Energy shares have surged after the company was granted its final key approval to produce gas.

LEIGH Creek Energy shares have surged after the company was granted its final key approval to produce gas.

The Adelaide company said it had received the third of three activity notifications from the State Government which it needed to be able to start gas production.

The company will be testing a pre-commercial demonstration plant, to show that its underground coal gasification process works at its Leigh Creek site.

If the process is successful it will be the next step towards commercialising gas production at Leigh Creek, and will enable the company to upgrade its contingent gas resources to the “proved and probable” stage, meaning there is more confidence the resources can be extracted.

“With on-site construction and drilling activities complete, and receive of the activation notification for operations, the PCD is being prepared for operations and the production of syngas,’’ the company said in a statement to the ASX.

“At this stage, initiation and commencement of syngas is expected to commence within quarter three, 2018.

“CK is mobilising the necessary resources to commence PCD operations.

“Successful PCD operations will be a significant milestone in LCK’s progress to commercialisation and the company’s immediate near-term objective of then upgrading of its 2963.9 petajoule 2C resources to a 2C reserve in Q4, 2018.

“The company then expects to start work on the approvals process for commercial production of syngas.’’

Leigh Creek shares were trading more than 18 per cent higher at 19c, up 3c.

LCK managing director Phil Staveley said it was a milestone for the company.

“Now that we have received the final document from the regulator preliminary to PCD operations, final preparations for PCD initiation and first gas flow can be completed,’’ Mr Staveley said.

“This is another significant event for LCK and completes a process we have been working on for many months.

“We look forward to advising the market on final PCD progress to initiation shortly.’’