A spokesperson for joint venture company Monash Energy told Dow Jones that Anglo and Shell had decided not to immediately move beyond concept phase as planned, blaming escalating construction costs.

The spokesperson said the concept phase would now be extended.

The joint venture was announced on September 21, 2006 and was the first project under the clean coal energy alliance formed by Shell and Anglo in May 2006.

The original timeline for the project had the initial concept phase concluding during 2007, and Monash was to carry out a study of the commercial and technical aspects, including carbon capture and storage. If successful, the study would form the basis for the feasibility phase and demonstration activities.

The Monash Energy project would involve the gasification – via Shell's proprietary coal gasification process – of Anglo American's brown coal from Victoria's Latrobe Valley for further conversion into clean transportation fuels, including virtually zero sulfur, synthetic diesel, using Shell's proprietary gas-to-liquids technology.