Syngas hopeful Linc floats $30m ASX plan
Richard Owen
04nov05
thecouriermail.news.com.au
GREEN diesel proponent Linc Energy is racing to complete a public float before Christmas to fund stage one of an ambitious world-first plan to build a $650 million coal-to-liquids plant near Chinchilla in southwest Queensland.
With oil and bowser prices soaring, Linc aims to produce CH2 or syngas through an "in situ combustion" process and convert it into cheap, ultra-clean, low-emission diesel fuel at a cost of about $US18 a barrel or just US11.3¢ (A15.2¢) a litre.
The Brisbane company established in 1998 and chaired by former Queensland premier Mike Ahern, has started briefing potential sub-underwriters on plans to raise $30 million through an offer of 86.14 million shares at 35¢ each, and expects to lodge a prospectus with the Australian Securities and Investments Commission next week.
Linc's business plan hinges on marrying for the first time Underground Coal Gasification technology (UCG) to burn coal where it lies underground and Gas to Liquids (GTL) technology to convert the resulting syngas into diesel.
Stage one involves construction of a 40 megawatt syngas-fired power station and a demonstration facility followed by development of a self-powered 20,000 barrel-a-day commercial plant forecast to generate an operating profit of $417 million a year.
Managing director and former coal mine owner Peter Bond, who bought CS Energy's majority stake in Linc last year for $1 million, will see his stake diluted from 88 per cent to about 55 per cent and escrowed for two years through the issue.
"We paid them (CS Energy) a fair price and we've spent a lot of money here," said Mr Bond who has rejuvenated the company's moribund Chinchilla project by bringing in Nasdaq-listed US company Syntroleum to provide liquefaction technology.
"At last look, the (convertible) note owed me about $6 million so it's not like I've come in and bought it for $100,000 and am trying to flog it off," he said.
Linc has inferred coal resources exceeding 8.1 billion tonnes on 13 tenements and spent $15 million proving its coals from Chinchilla can be successfully ignited and extinguished after flaring gas there for almost three years.
Mr Bond said a preliminary diesel offtake agreement had been negotiated with BP which was also interested in becoming an equity partner as was Syntroleum.
The issue, being managed by Sydney broker BBY, equates to 30 per cent of the company which would boast a market capitalisation of about $100 million. |
