Carbon Energy Limited (ASX:CNX) Environmental Approval Obtained for UCG Project in Chile With Joint Venture Partner Antofagasta (LON:ANTO)
In December 2009 Carbon Energy announced an Agreement with Antofagasta, one of the world's largest copper producing companies, to jointly assess and develop an UCG project at Mulpun, Chile, to support the countries growing energy demand. Carbon Energy will earn a 30% interest in Antofagasta's coal tenements by applying its world leading UCG technology.
The Environmental Approval obtained this week is a key milestone in the development of the project and allows the parties to construct and operate a pilot scheme that includes its first UCG panel and associated above ground facilities at Mulpun.
The intention of the pilot is to confirm the quality of the gas produced from the Mulpun coal deposit so that detailed design work and equipment selection can be carried out for a major power generation project at that site.
The parties have together completed a significant program of work since executing agreements in December 2009 including the following:
- Obtaining Environmental Approval for the trial,
- Entering into option agreements to acquire the land associated with the Mulpun coal deposit,
- Completing a detailed work plan and budget for the initial trial project, and
- Completion of a market study and economic feasibility study for a number of commercial uses for syngas, including power generation.
The next steps in the project are to complete the Design Plan and conduct Front End Engineering & Design (FEED). Upon acceptance of the FEED study by both parties a formal joint venture will be formed.
Carbon Energy's Managing Director, Andrew Dash said "This is an important milestone for the project as this is the key regulatory approval required to proceed with our first international UCG project with our partner Antofagasta."
"Chile provides an ideal market opportunity for Carbon Energy due to the fact that energy demand is forecast to grow at 6% to 7% annually over the next decade and there is an under supply of domestic energy. Chile is highly exposed to increases in the already high price of imported supplies of diesel, natural gas, LNG and coal."
"We are very excited to have obtained the Environmental Approval for the project. Our primary focus is now moving to the successful construction and operation of the first UCG panel, in parallel we will be commissioning studies into the optimal size and equipment selection for our first major power project in Chile" Mr. Dash said.
About Carbon Energy Limited
Carbon Energy (ASX:CNX) (OTCMKTS:CNXAY) is building a gas business, utilising its unique keyseam technology.
The Company is committed to providing industrial gas users with an affordable and secure source of high quality feedstock, as gas prices remain strong, through increased demand across our key markets.
Carbon Energy is the only company to complete a full-lifecycle, commercial scalable underground gasification trial. The Company's keyseam technology has successfully accomplished all the recommendations outlined by the Queensland government's Independent Scientific Panel (ISP) which included intense, independent environmental scrutiny.
Carbon Energy Limited