Plans to establish a $2.6 billion coal gasification plan using the deep brown coal resources at the old Leigh Creek mine in South Australia have been pushed along after an initial feasibility study suggested the project could also target the low cost production of fossil-fuelled hydrogen.
The Leigh Creek Energy Project is seeking to tap into brown coal reserves in South Australia left idle by the closure of the state’s two highly polluting and ageing coal fired power generators, using an ‘in-situ’ coal gasification process that involves the production of syngas directly within the coal deposits.
The controversial project comes as the state government pushes its own “green hydrogen” strategy that it has said could create an “epic” lift in the state’s wind and solar capacity, potentially rising six fold or by more than 12GW if three renewable hydrogen hubs identified by the state Liberal government go ahead.
Despite this, and the push for zero emissions, Leigh Creek is still trying to push the idea of syngas from its coal reserves, with the company saying it will drill down into the coal deposit, and with a mixture of heat, water and air and a number of chemical conversions convert the coal into a syngas. A total of 41 gasifiers are planned for the Leigh Creek site.
Primarily, the project is looking to undertake the production of fertiliser materials, by converting the syngas into ammonia, and subsequently into urea, and will target export demand for the fertiliser materials.
The process of manufacturing urea involves the combination of ammonia with carbon dioxide, with 730 kilograms of carbon dioxide consumed in the production of each tonne of urea. The company says this will help account for some of the carbon dioxide produced from the extraction of syngas.
The company says it will also explore the potential of producing hydrogen gas, as well as the on-site storage of carbon dioxide produced from the processing of syngas. But it does not expect the project to be ‘carbon neutral’ until 2030 at the earliest, and is not clear about how that might be achieved..
“Leigh Creek Energy will also be the lowest-cost sovereign producer of urea, providing additional security to a critical product for the Australian agricultural sector. It also has the proven the ability to produce hydrogen, and at half the cost of the Federal Government’s target,” managing director Phil Staveley said.
“Building significant infrastructure in a remote part of Australia will not be without its challenges, but the Leigh Creek Energy Project will be a fully integrated urea production project with gas feedstock generated on-site and the [pre-feasibility study] has reduced and eliminated a number of potential project risks. We express our gratitude to and acknowledge the support of the project team members including contributing consultants and reviewers for their thorough detailed work,” Staveley added.
The Morrison government, which is refusing to follow its major trading partners and put in a net zero emissions target by 2050, has been open about its desire to support the emergence of a fossil fuel production industry in Australia, combined with carbon capture and storage facilities, as it potentially provides a lifeline to the fossil fuel industry, while supporting the emergence of an export market for hydrogen fuels.
The Leigh Creek project will also include an on-site 100MW power station, fuelled by the coal derived syngas, that will deliver power to the facility.
The ASX-listed Leigh Creek Energy said that further work to demonstrate the project’s viability would be required, and it plans to commence a ‘bankable’ feasibility study in early 2021, before seeking further investment to fund the development of the project.