The agreement includes knowledge-sharing and aims at research cooperation in evaluating the UCG technology.

UCG is a coal to synthesis gas technology that uses air or oxygen to gasify coal in the coal deposit underground through a series of injection and extraction wells.

Eskom initiated its UCG technology development in 2002 and successfully piloted it for five years.

The results proved the technology worked and was able to efficiently extract the energy from complex, poor quality coal resources. The next step is to improve and then prove the quality of the gas.

Both Sasol and Eskom have a licensing agreement with Canadian technology partner Ergo Exergy Technologies.

Ergo’s UCGTM technology has been the basis for the success of three UCG projects in the past few years.

These include the Huntly West UCG project in New Zealand developed by Solid Energy, Linc Energy’s initial Chinchilla UCG project in Australia, and Eskom’s Majuba UCG pilot project in South Africa.

The UCGTM technology is also being applied in the development of commercial UCG-based energy projects in Canada, the US, Australia, New Zealand, India, China and elsewhere.

Sasol managing director Henri Loubser said the company was excited about UCG as a technology and specifically in the South African environment.

“UCG has the potential to utilise coal that is not minable through conventional mining technologies,” he said.

Eskom group executive sustainability Dr Steve Lennon said Eskom was proud of its role as a global leader in this technology.

“At the same time this is not a project we can execute alone and partnerships such as this one will help us maximise the benefits to South Africa,” he said.