The heightened interest in alternative energy has prompted the likes of West Perth-based gold company Metex Resources Pty Ltd to diversify into this sector, with the company securing a joint development opportunity with CSIRO.
The heightened interest in alternative energy has prompted the likes of West Perth-based gold company Metex Resources Pty Ltd to diversify into this sector, with the company securing a joint development opportunity with CSIRO to produce power generation from coal deposits in Queensland’s Surat Basin.
The joint venture company, Carbon Energy Pty Ltd, is set to deliver large scale energy projects based on cleaner and greener use of coal through the use of underground coal gasification technology.
Metex acquired a 50 per cent interest in Carbon Energy by subscribing $2.5 million in equity capital over a 12 month period.
The joint venture comes at a time when the federal government is placing greater focus on the gas-to-liquids and coal-to-liquids alternative energy sectors, with the Prime Minister instructing Industry Minister Ian Macfarlane to prepare a proposal for the further development of the technology in Australia.
The UCG technology transfers energy from coal into syngas (hydrogen and carbon monoxide), which can be used in industrial processes including low emission fuel gas for power generation, and as a feedstock for catalytic synthesis of liquid fuels, chemicals and fertilisers.
The UCG process produces syngas by injecting oxygen directly into the coal seam through one set of boreholes, and extracting the syngas through another set.
Carbon Energy executive general manager Dr Cliff Mallett said the Surat Basin plant, in its final stage, would produce about 34,000 barrels a day.
“Our modelling of all costs of running the plant is an investment of US$750 million to US$800 million,” he said.
“At this final stage, we should produce a profit of US$560 million per annum if the product is sold at $US75/bbl.”
Dr Mallett said the process removed carbon dioxide which significantly reduced the amount of greenhouse gas emissions.
“If we use UCG gas straight out of the ground… no one would use that because of the high emissions,” he said.
“If we take the carbon dioxide out at this point the costs are still the same as conventional methods…but we can halve our emissions.”
The syngas created can be further transformed with steam into hydro-gen, with potential uses in fuel cells, turbines and transport fuel.
Metex Resources finance director Max Cozijn said the new technology employed would provide savings in capital costs compared to existing technology used for coal-to-liquids.
“Using UCG we can replace surface gasifiers [used in conventional coal-to-liquids meth-ods] at a saving of at least 20 per cent in capital costs,” he said.
“UCG also recovers around 80 per cent of the stored energy in the coal steam, as against the coal bed methane method, which recovers 20 per cent or less, and mined coal which recovers around 40 per cent.”
The trial will take place at Car-bon Energy’s three coal leases in the Surat Basin in South East QLD.
Carbon Energy expects to start generating electricity from the plant by the end of next year.
The company aims to raise capital for the various stages, starting with a small scale demonstration of technology, followed by construction of a 30MW power plant.