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The introduction of underground coal gasification (UCG) synthesis gas into a reactor that produces high quality synthetic fuel is a world first, according to the company.
“This is the event that my team and I have been working towards now since the day Linc was listed on the ASX around two-and-a-half years ago. The production of the first liquids at Chinchilla is a significant milestone, not just for Linc Energy but also for the global community,” Linc chief executive Peter Bond said.
“Linc Energy has now proven that it can produce liquid fuels from UCG gas. This process provides the potential for billions of tonnes of stranded coal resources to be converted into transport fuels in an environmentally acceptable way.
“And when you think that each tonne of coal equates to approximately 1.5 barrels of fuel, the potential of what Linc Energy has achieved today is simply enormous.”
Over the coming months Linc will continue to operate its GTL demonstration facility to assist with finalising engineering for the company’s proposed 20,000 barrels per day commercial facility that is planned for commencement of construction in the next 12 months.
Linc also announced today it had signed a business cooperation contract to undertake underground coal gasification in Vietnam.
The deal was signed with the Vietnam National Coal-Mineral Industries Group (Vinacomin) and the Marubeni Corporation of Japan.
The project will be developed in the Red River Delta adjacent to Hanoi in Vietnam. The area has estimated non-JORC reserves of 30 billion tonnes of coal.
Under the deal, the companies will undertake a four-stage project to verify feasibility of exploiting the coal via UCG for power and GTL production.
Linc expects to commence construction of a UCG field in the second quarter of 2009.
Linc today also completed a $17 million placement which will be used as working capital on the back of settling the SAPEX merger to be completed later this week.
The $17 million capital raising was completed by the placement of 5.86 million shares at $A2.90 each to sophisticated offshore and local investors.
Linc was trading up 24.4% at midday today at $3.98.
