Approvals for the 1 petajoule per year UCG project were granted by Mines and Energy Minister Geoff Wilson and the Environmental Protection Agency in Queensland.
Carbon Energy will begin construction of the surface and underground components shortly, with the surface plant and associated facilities to be built and operated by Thomas & Claffey.
The $A20 million project will be located within Carbon Energy's coal resource in the Surat Basin, Queensland. The resource is estimated to contain 2000PJ of energy, with approximately 1000PJ that is potentially recoverable using UCG extraction technology.
Commissioning of the facility is expected during the third quarter of 2008, with UCG syngas production to follow as part of a 100-day production test of Carbon Energy's standard syngas module.