Brisbane, Dec 9, 2008 AEST (ABN Newswire) - Linc Energy Ltd (ASX:LNC)(PINK:LNCYF) has extended its Memorandum of Understanding with BP Australia Pty Ltd (BP) that provides it with the option to purchase a minimum of 14,000 barrels a day of ultra-clean diesel to be produced at Linc Energy's production plant to be commissioned in South Australia.
The Memorandum of Understanding with Linc Energy involves BP potentially purchasing up to 70 per cent of the initial 20,000 barrels of ultra-clean diesel and other clean fuels to be produced at the plant.
Chief Executive of Linc Energy, Mr Peter Bond, said "We are delighted to continue our relationship with one of the world's largest energy companies to participate in an MOU to potentially purchase the ultra-clean diesel that Linc Energy will produce."
"This agreement assists Linc Energy to continue its path to being a significant player in the world's ultra-clean fuel market", he added.
Linc Energy's first plant will produce sulfur-free diesel through the two proven processes of Underground Coal Gasification (UCG) and Gas to Liquids (GTL). When the two processes are combined, the total projected production target of the planned full-scale South Australian plant is over 2 billion barrels of diesel over its life.
The UCG process is used to turn the coal reserves into energy by "gasifying" the coal underground. The resulting gas, called Syngas, is then piped above the ground as feedstock for the GTL plant. The Syngas will be used to produce liquid fuels, such as ultra-clean diesel, as well as generate electricity.
Linc Energy, which has been at the forefront of the UCG process development over the last 10 years, successfully commissioned its UCG to GTL demonstration plant in October 2008 which produced its first hydrocarbon liquids. This plant proved the successful viability of combining these two proven technologies (UCG and GTL). Subject to acquiring the required State government approvals, the construction of the first full-scale 20,000 barrels per day commercial facility is planned to break ground in late 2009.
In the meantime, Linc Energy will continue to develop the UCG to GTL process at its Chinchilla demonstration facility in Queensland.
For further information please contact Peter Bond.
Contact
Mr Peter Bond
Chief Executive Officer
Phone: +61 7 3229 0800
E-mail: pab@lincenergy.com.au
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