Remote Coal Gas Project to 'ease South Australia's power crisis'

Publicly listed Leigh Creek Energy yesterday said it was advancing plans to construct a gas plant at the site of the former Leigh Creek coalmine, 500km north of Adelaide, to produce commercial quantities of pipeline-quality methane.

It is also looking at developing an on-site power station.

However, South Australian Energy Minister Tom Koutsantonis cautioned yesterday that Leigh Creek Energy had “yet to develop an environmental impact report that will inform the potential approval process for this project”.

Leigh Creek Energy chief executive Phil Staveley said the state government was “well aware of our plans”.

“The recent power problems in South Australia highlight the need for alternative baseload power generation and we believe we have one strong solution,” Mr Staveley said.

Leigh Creek Energy and the Shanghai Electric Power Generation Group announced a joint venture last April to build, own and operate a power station in the outback town, where an open-cut coalmine had operated for more than half a century.

It shut down in November, putting about 250 people out of work, following the closure of the associated Northern power station at Port Augusta.

Leigh Creek has infrastructure including a rail line, sealed road access, high voltage power, water, an airfield and other services, which came under control of a government agency on January 1.

Shanghai Electric this week committed to further studies into using a combination of gas, high-efficiency coal and solar or wind power to allow the production of baseload renewable energy.

The joint venture plans to build a demonstration gas plant at the former Leigh Creek mine site and “flare” gas later this year.

It will then move to the construction of a commercial plant which it expects to be operational by 2019-20.

Mr Staveley said a process called “in-situ gasification” would use deep, stranded coal reserves that could not be accessed through traditional mining techniques.

The process involved converting the coal into a gaseous form, syngas, then producing methane and other valuable gases.

The gases could then be transported by a new pipeline to connect with the east coast gas network as well as being used in a new gas-fired power station. “Our research has shown that Leigh Creek has reserves of almost 3000 petajoules of gas, making this one of the largest land-based gas projects in Australia,” Mr Staveley said.

The company estimated the project would have a life span of more than 30 years “at a time when gas reserves around Australia to support major new developments are becoming critical”.


Leigh Creek Energy has established a working capital facility with the Commonwealth Bank, after completing a scoping study and moving into a pre-feasibility study phase. The company also has assistance from federal agency Innovation Australia.

From the Australian 14/2/2017