In separate statements yesterday, Metex said its joint venture with CSIRO has started designing its first UCG demonstration plant, while Linc’s own project has received significant project status by the state government.

Linc Energy managing director Peter Bond said the government was calling for the company to produce an environmental impact statement (EIS) for the project, which converts coal gas to liquid underground.

“Linc Energy is delighted that the project has been declared to be a ‘significant project’,” he said.

“This will provide Linc Energy with a coordinated approach to the comprehensive EIS process that Linc Energy will now undertake.”

In another milestone, Linc said interim drilling results showing an expanded coal area. In addition, the company was also in discussions with a number of interested parties overseas, Bond said.

Meanwhile, a joint venture between the CSIRO and Metex has started designing its first UCG demonstration plant, to be constructed in Queensland’s Surat Basin.

Both groups expect the power generation to be comparable in cost to conventional coal-fired stations, but with significant reductions in accompanying greenhouse emissions.

Construction of the one-petajoule plant is expected to start this September.

The JV company, Carbon Energy, established last July, has contracted engineering firm Thomas and Coffee to design the UCG demonstration plant, to be based on over 45 million tonnes of high quality coal resources at Bloodwood Creek on EPC867, in the Surat Basin.

The announcement follows news earlier this week that Rio Tinto and BP planned to have a $2 billion coal-to-hydrogen power generation project operating at Kwinana, Western Australia, by 2014.

Metex managing director Ian Walker said the UCG demonstration plant would be designed to produce syngas from the underground gasification of suitable coal reserves at a sustainable rate.

The gas would be used as a suitable power supply/and or feedstock for liquid fuels and petrochemicals, while the resulting carbon dioxide would be geosequestered.

“Carbon Energy is planning to demonstrate a 1PJ per annum UCG syngas module at the Bloodwood Creek deposit,” Walker said.

“This uses a standard UCG module developed by the CSIRO which gasifies coal over a module life of three years.”

Walker said each module would produce enough syngas to produce 50 million cubic metres (1.7 billion cubic feet) of hydrogen per year, or sufficient energy to power a 20MW combined cycle power plant.

Underground coal gasification has been used in large-scale operations in former Soviet Union states for more than 40 years, while numerous exponential trials have been performed in former Soviet states, the USA, Western Europe and several other countries.