Linc Energy Limited Continues And Expands Its MOU With BP Australia to Supply Synthetic Diesel from UCG
Linc Energy Limited has extended its Memorandum of Understanding (MOU) with BP Australia Pty Ltd. This MOU allows for BP Australia to be the first customer to purchase a minimum of 14,000 barrels per day of diesel to be produced via Underground Coal Gasification (UCG) and subsequent Gas to Liquids (GTL) processing at Linc Energy’s first production plant to be commissioned in South Australia.
The Memorandum of Understanding provides BP with the opportunity to purchase up to 70% of the initial 20,000 barrels of synthetic diesel and other fuels to be produced at the plant in a take or pay agreement.
Linc Energy intends to combined UCG and CTL processing to economically convert vast stranded coal deposits into synthetic liquid fuels. Linc Energy will also use the Syngas produced from UCG technology as feedstock for gas turbines to generate electricity.
|Exploratory drilling at Orrroroo 5. Click to enlarge.|
Earlier in November, Linc confirmed that its UCG to GTL commercial location will be at Orroroo, near Port Augusta in South Australia. Exploratory drilling has indicated a significant coal mineralization target in accordance with the JORC Code of 1.0 to 1.3 billion metric tonnes in the Orroroo area.
The coal deposit is at an ideal depth for Underground Coal Gasification (UCG) and initial analysis confirms that the coal properties and the geology of the overlying strata are all well suited to host a world-scale UCG project. Linc Energy believes that this is the best UCG location and coal deposit that it has drilled or examined to date, especially given the significant size of the deposit, the seam thickness, the flat topography and other attributes.