Underground Coal Gassification (UCG). It's like PBG's THAI process, except for coal. Lots of activity in Australia.
business.smh.com.au
Linc synthesises first diesel from coal gas
Jamie Freed
October 15, 2008 - 10:47AM
Linc Energy produced the first synthetic diesel fuel from underground coal gas at a demonstration plant in southern Queensland yesterday, paving the way for a $1 billion full-scale project.
Linc hopes to build a plant capable of producing 20,000 barrels of diesel fuel a day with an operating cost of $US28 a barrel a high profit margin even at today's reduced oil prices.
Linc shares opened 2.4% higher today at $3.79, in a lower general market.
The full-scale low emissions project, which could begin construction in a year and be completed in three years, will be funded from Linc's recent agreement to sell its Teresa coking coal exploration permits to China's Xinwen Mining for $1.5 billion.
Because Linc has yet to bank any proceeds from the coal permits sale set to be finalised this week, with full payment received within six months it raised $17 million from institutional investors at $2.90 a share yesterday to help fund its working capital needs.
"I like to have over a year's worth of working capital around me at any time,'' Linc's chief executive, Peter Bond, said. "We won't be profitable until we get the commercial facility of 20,000 barrels a day happening.''
Its Queensland demonstration plant will use its initial 10 to 20 barrels a day for promotional activities such as demonstrating its use on public buses. Once its full-scale plant enters production, it will sell the diesel to BP for distribution.
Linc's technology, which produces gas from uneconomic coal deposits, could be applied in similar plants in Vietnam, the United States, China and other countries.
Mr Bond left yesterday for the US on an investor roadshow, where he also planned to examine North American expansion plans.
Linc has signed a deal with the Vietnam National Coal-Mineral Industries Group and Japan's Marubeni to examine the viability of coal gassification for power generation and liquids production in Vietnam.
Linc aims to partially fund its overseas expansion by selling its Pentland thermal coal licence in Queensland's Galilee Basin during the first quarter next year. |
