Leigh Creek Energy Ltd (ASX:LCK) has developed a deal with China Communications Construction Company Ltd (CCCC) to invest in large-scale infrastructure projects beyond in-situ gasification in South Australia.
CCCC committed to providing Leigh Creek with a draft heads of agreement (HoA) allowing the companies to cooperatively develop projects such as ports and railway.
The scope of collaboration between the two parties includes: project consultation; investment in Leigh Creek and its project financing; and construction and operation.
Leigh Creek executive chairman Justyn Peters said having CCCC on board was not only good news for Leigh Creek, but a huge opportunity for South Australia.
Peters said: “To have such an internationally renowned company in Adelaide is a great opportunity for LCK and the state to showcase the project.
“Active steps have been undertaken since our last announcement to bring this HoA and cooperation agreement with CCCC to fruition.
“It shows how significant world players are as excited as we are in developing this project.”
Planning project cooperation
The two parties will also sign a project cooperation agreement to establish the best model to go forward on the Leigh Creek Energy Project, with specific details to be included in a special vehicle project agreement.
CCCC is the world’s largest port design and construction company, independently designing and constructing seven of the world’s ten largest ports.
It is also the world’s largest offshore oil drilling platform design company.
The 63.8% Chinese state-owned enterprise has revenue of more than US$70 billion and more than 118,000 employees.
Other shareholders include multiple affiliates, or funds managed by, Merrill Lynch, BlackRock and JPMorgan Chase.
Leigh Creek is making significant progress at the pre-commercial in-situ gasification demonstration facility at its Leigh Creek Energy Project in South Australia, with gas flows continuing for 53 days.
LCK is aiming to produce high-value products such as electricity, methane and fertilisers from the remnant coal resources at Leigh Creek, utilising in situ gasification (ISG) technologies.
LCK’s recent progress is bringing the company closer to commencing the process to upgrade a portion of its 2,964 2C resource to proven and probable reserve status.
The company’s major objective is to achieve commercial syngas flow and commencement of the resource upgrade process in Q4 2018.