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Liberty prioritises A$1.4bn gas project

20th March 2013

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – ASX-listed gas and fertiliser group Liberty Resources on Wednesday announced that it would place a higher development priority on its A$1.4-billion gas plant in central Queensland.

MD Andrew Haythorpe noted that rising domestic gas costs and the future anticipated gas supply shortfalls in the eastern states of Australia, warranted an earlier standalone development of the proposed gas, electricity and fertiliser complex.

“The availability of stable and consistent quality gas production is an essential element of achieving low-cost energy and commercial production of urea from gas on the scale we have envisaged for the larger plant,” Haythorpe said.

“As our scoping studies and other work are now at an advanced stage after three successful years of project advancement and tenement selection, it is increasingly clear that a substantial decrease in initial project costs by going the gas plant first, will be easier to finance, generate a solid return on capital of around 22% and offer less development risk and timeframes.”

Haythorpe noted that feedback from financiers had suggested that developing the gas plant first would provide the company with a wider appeal, as Queensland was looking for new gas supplies in the face of uncertainty in its domestic gas supply, as local volumes were dedicated to long-term liquefied natural gas (LNG) contracts for processing facilities being developed at Gladstone.

“This market pressure favours a higher priority focus on getting our own gas plant established but in a manner which continues to allow Liberty to back-end the gas plant into our long-term objective of a combined and world-first integrated low-cost gas, electricity and urea production operation,” he said.

Liberty plans to inject saline water and oxygen into coal seams to generate natural hydrogen-enriched syngas to bring to surface from unmineable coal seams across the company’s large tract of tenements that stretch all the way from Goondiwindi in the south, to Longreach in the north. The bulk of the acreage is on non-farming state-held land.

While the process uses conventional horizontal drilling, it has the dual benefit of soaking up saline groundwater from the surface, thereby improving top-soil conditions, and leaving the residue salt from gas generation buried 500 m to 1 500 m deep in confined coal seams well below any aquifers, the company said.

Liberty’s larger project proposed a single but integrated complex comprising separate plant units for syngas clean-up, acid facilities to produce refined sulphur, low-cost power generation, ammonia and urea processing facilities and a water treatment component.

“Our decision to move ahead on the gas plant follows the emergence by 2013 from three years of work of new state-of-the-art gas processing technology able to produce pipeline or LNG specification gas - and that promises much earlier cash flow for Liberty,” Haythorpe said.

“This cash flow will be critical to helping fund Liberty’s contribution to the subsequent integrated plant.”

The Denison project has an Inferred coal resource of 846-million tons. Haythorpe says Liberty’s work to date points to a production of 1 000 PJ of raw syngas per every 100-million tons of coal, or the equivalent of just under 900 PJ per 100-million tons of coal when upgraded to pipeline specification gas.

If layered over the company’s fertiliser plant specifications, the same gas volumes from coal would produce 30-million tons of ammonia or 72-million tons of low-cost urea – at a time when the global urea market consumes about 160-million tons a year.

Edited by Creamer Media Reporter

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