West Perth-based clean coal technology developer Metex Resources Ltd, through its Joint Venture with CSIRO and Carbon Energy Pty Ltd (CEPL), has announced today that it had received all necessary approvals to proceed with a large-scale A$20 million Underg
West Perth-based clean coal technology developer Metex Resources Ltd, through its Joint Venture with CSIRO and Carbon Energy Pty Ltd (CEPL), has announced today that it had received all necessary approvals to proceed with a large-scale A$20 million Underground Coal Gasification (UCG) syngas trial at Bloodwood Creek in the Surat Basin, located 55km west of Dalby in southeast Queensland.
The approvals - granted by the Minister of Mines and Energy for Queensland and the Environmental Protection Agency (EPA) - represent the final step before development and construction of the surface and underground components can proceed for what will be the world's first commercial scale oxygen-injected UCG trial.
CEPL has identified a strategic site within its 100 million tonne high-quality coal resource at Bloodwood Creek and will evaluate the prospective commercialization of UCG and its product syngas.
'This is the most significant development in our UGC programme to date and effectively gives us the green light to begin what will be a large-scale demonstration of the capability of this outstanding technology," said Metex's Managing Director Ian Walker.
"The approvals announced today represent a major breakthrough for Metex and the Carbon Energy Joint Venture.
The UCG trial will involve drilling boreholes from surface to the underground coal seam, and gasifying the coal in-situ.
This will produce a syngas suitable for conversion into feedstock for power generation, or for conversion into ultra-clean liquid fuels and chemical.
"A successful trial demonstration will confirm our status as the world's first Company with the ability to utilize commercial scale UCG syngas, which, through the flexibility in the form it takes, can meet the gas supply requirements for any power station or chemical plant," added Mr Walker.
The surface plant and associated facilities are being built and operated by leading engineering and mining services company, Thomas & Coffey Limited, at an approximate cost of A$20 million.
Construction and commissioning of the facility is expected during the third Quarter of 2008 with the UCG syngas production following shortly thereafter as part of a 100-day production test.
UCG promises to significantly reduce the cost of introducing new clean coal technologies, by cutting costs of the coal gasification phase.
UCG replaces the coal mine and surface coal gasifier stages, which are both large capital items, thus reducing both costs and environmental impact.
"The start of this trial represents a landmark achievement for Metex and, if successful, will position Metex as a trailblazer in the development of UCG projects on a commercially viable level," said Mr Walker.
Metex last year reached agreement to acquire a 100% interest in CEPL by purchasing CSIRO's interest for a combination of cash and shares.
Metex shareholders will be required to approve this transaction together with a change in the Company name from Metex to Carbon Energy Ltd.
