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Gold/Mining/Energy : Gasification Technologies

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To: Dennis Roth who wrote (86)	5/10/2006 6:32:46 AM
From: Dennis Roth	Read Replies (7) of 1740

Linc has rough debut on ASX Date: 10/05/06 By Alex Wilson seven.com.au Linc Energy Ltd is starting work on a prototype plant to prove its world-first project to make ultra-clean fuel from coal is sound, ahead of a move to large-scale production. The Brisbane-based alternative energy company had a rough introduction to public life with its shares ending their first day of trading on Wednesday down five cents on the issue price at 20 cents. The company issued 88 million shares at 25 cents each to raise $22 million, which it will spend on its plan to produce fuel by combining two technologies - underground coal gasification (UCG) and gas to liquids (GTL) processing. UCG is a process whereby coal is burnt where it lies underground to produce gas and Linc Energy has been doing this at its site at Chinchilla, north west of Brisbane, since 1999. Now it plans to spend $6 million on the development of a demonstration GTL plant to turn that gas into sulphur free diesel and aviation fuel. This may sound like a lot of work to make diesel but managing director Peter Bond says the key to the project is its low cost of production. Mr Bond says Linc will be able to make a barrel of diesel for less than $US25 ($A32.36) which, with sales prices around $US85 ($A110.01) a barrel, ensures a good profit margin. The demonstration plant will only produce up to five barrels per day but Mr Bond says it is a necessary step to take before the company goes on to build a $500 million plant capable of producing 22,000 barrels a day. "Proof of concept is a reasonable step to take for investors," he said. The company has signed a memorandum of understanding with BP for the sale of all the fuel it can produce from its full-scale plant. Mr Bond said the company would fund the development of the plant through a mix of debt and a further capital raising. Linc also plans to spend $2.2 million over the next two years on expanding its existing UCG facility and another $1 million on a drilling program aimed at boosting its coal resource. Copyright © 2006 AAP

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