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Clean Global Energy in JV for $400M Underground Coal Gasification Project in China

Australia-based Clean Global Energy Limited (CGE) secured a Joint Venture Agreement with Beijing Yusenjiayu Environmental Protection Technology Co. Ltd of Beijing, China (YSJY ), Inner Mongolia Gu Xin Mining Co. Ltd of Beijing, China (GX) and Goldbridge Clean Tech Energy of East Sussex, United Kingdom (GB) to undertake a US$400M commercial UCG (underground coalgasification) project on GX’s Inner Mongolia coal deposit.

Ucgcge
Underground coal gasification. Click to enlarge.

The JV agreement follows on from a successful review of GX’s coal data and subsequent detailed discussions and negotiations over the last week following the previous announcement of a Memorandum of Understanding between the parties on 17 August 2009. Elements of the JV are:

  • The JV company (JVC) will be formed in Hong Kong to undertake a proposed $US400-million UCG project on GX’s 1.8B tonne coal deposit in Inner Mongolia;

  • The JVC and project is to be funded by a proposed capital raising on the Hong Kong Stock Exchange of not less than US$120 million and debt funding of not more than US$280 million;

  • Initial funding of the JVC prior to the listing, of US$1m will be contributed by the joint venture partners in proportion to each parties shareholding. CGE’s estimated portion of this will be US$350,000 which will be funded from existing cash;

  • The JVC is to enter into a documented off-take agreement arranged by YSYJ with Inner Mongolia Sukli Oil and Gas Development Co. Ltd for the supply of between 5Mm3 to 12Mm3 per day of UCG Syngas on commercial terms at the best possible market price (current price 1 CNY / m3);

  • The JVC will enter into a commercial agreement with CGE to design, operate and manage the UCG plant with fees payable by the JVC to CGE once funding for the project has been secured;

  • All intellectual property rights relating to UCG, including the design of the UCG plant, UCG technology, knowhow, and processes shall be retained and owned solely by CGE;

  • CGE to hold a 35% controlling interest in the JVC and 2 board seats with the other parties holding 1 board seat each.

CGE’s UCG technology uses an advance process known as Controlled Retractable Injection Points (CRIP) that provides greater control and efficiency in the UCG process. (Earlier post.) The CRIP UCG process was successfully trialed in a €17 million European project in Spain which was headed up by CGE’s Technical Director, Dr. Michael Green. Dr. Green has continued to advance the CRIP technology, which he is currently implementing in commercial projects in the UK and Europe.

Air emissions from an IGCC power station using UCG Syngas with CO2 sequestration reduces greenhouse gas emissions by more than 50% compared to conventional coal fired power stations, according to CGE.

Comments

sulleny

At least the majority of the process remains underground presumably with few opportunities for leakage. But how do they control the burn throughout the seam? What are the chances of runaway burn? And what of ground cover absorption of methane?

We could certainly use the methane/H2 if the downsides of this process can be managed.

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