Nordic Oil And Gas and Western Warner Oils Exploring Underground Coal Gasification for Canada Project

4 July 2009

Nordic Oil and Gas Ltd. and its joint venture partner, Western Warner Oils Ltd. are examining the possibility of using underground coal gasification (UCG) as a means to convert the coal into product gas at its recently acquired Drumheller, Alberta property.

Nordic is currently making preparations to submit an application to the Province of Alberta for a UCG pilot project, the second such project ever undertaken in Canada, and one of just a few in North America. The Company announced on 1 June 2009 that it had acquired 3,856 hectares (9,528 acres) of coal leases located at Drumheller, Alberta and that historical data had determined that the leases contained approximately 54,000,000 recoverable tonnes of coal

In March of this year, the Alberta government, through the Alberta Energy Research Institute, announced that it was providing C$8.83 million for a $30-million deep coal gasification project being undertaken by a Calgary-based company. (Earlier post.) It is expected the project will demonstrate the ability to produce syngas from Alberta’s coal resources with the future potential of utilizing the coal seams for carbon capture and storage.

The basic UCG process involves drilling two wells into the coal—one for injection of the oxidants (water/air or water/oxygen mixtures), and another some distance away to bring the product gas to the surface. The technique offers an alternative to conventional coal mining methods.

—Donald Benson, Chairman and CEO of Nordic Oil and Gas Ltd.