Case Studies

Key engineering contracts for an energy company’s large scale urea production facility

Piper Alderman assisted Leigh Creek Energy with the negotiation of a feasibility study, front end engineering and design and turnkey fixed price engineering, procurement, construction and commissioning contract for a 1mtpa urea production facility in South Australia.

Team: Mark Gordon, Daniel Harris, Bianca Jennings, Peter Watson

Service: Banking & Finance | Corporate & Commercial
Sector: Energy & Resources | Mining

Leigh Creek Energy Limited (Leigh Creek Energy) is an ASX-listed energy company focussed on developing in South Australia its Leigh Creek Urea Project (Project), to produce low-cost nitrogen-based fertiliser for key agriculture markets in Australia and elsewhere.

The Feasibility Study, Front End Engineering and Design and Fixed Price Turnkey Engineering, Procurement, Construction and Commissioning contract (the Contract) was awarded to the South Korean based leading global engineering contractor, DL E&C Co. They will partner with Leigh Creek Energy to carry out a Bankable Feasibility Study and the Front End Engineering and Design for the Project and, once Leigh Creek Energy has made a final investment decision for the Project, proceed with carrying out the Engineering, Procurement, Construction and Commissioning of the urea production facility for a fixed turnkey price presently estimated to be in the vicinity of US$1.6 billion. DL E&C Co. has agreed to assist Leigh Creek Energy with introductions to Korean export credit agencies and support, in conjunction with Leigh Creek Energy’s financial advisers, in seeking funding for the Project.

Piper Alderman has also assisted Leigh Creek Energy with the negotiation and finalisation of a contract for 8 syngas operated electrical generators required for the syngas production and collection phase of the Project (which will utilise syngas derived by in-situ gasification of gas seams underlying former coal open pit mining operations at Leigh Creek).
Piper Alderman has worked and is continuing to work with Leigh Creek Energy on a range of possible financing transactions connected with the Project.

Given Piper Alderman’s experience in the Energy & Resources sector, Piper Alderman was well placed to provide Leigh Creek Energy with holistic advice on the contract negotiations with DL E&C Co and other matters on which we have worked and continue to work. Piper Alderman looks forward to further supporting Leigh Creek Energy with the development of the Project.

The team advising Leigh Creek was led by Consultant, Peter Watson, with Partner, Bianca Jennings, advising on FIRB aspects and Mark Gordon advising on the financing arrangements associated with the project.