Linc Energy and Golden Concord Group subsidiary GCL Projects are finalizing a joint venture arrangement which will see the companies commercialize the first underground coal gasification (UCG) to gas to liquids (GTL) operation in China.
Technical due diligence of the venture has been completed and both companies are finalizing legal documentation in an effort to start construction on the UCG operation.
The current preferred location is a large coal area within Inner Mongolia which is owned by GCL. There is substantial data with respect to this coal location and it is hoped that site drilling to finalize the location will begin soon after the contract has been signed.
Linc’s chief executive officer Peter Bond says it’s expected the deal will be closed during the next few months. “We are very happy with the relationship with GCL. Each company has hosted the other in recent times as we continue to work through the outstanding legal documents. Whilst these discussions are taking a little longer than expected, it was always going to take time given the size and nature of this transaction.
“Importantly, in parallel with the legal negotiations, the parties are working to finalize selection of the preferred initial site in order for GCL to fast track permitting and ensure that the joint venture's UCG operations in China, which will probably be in Inner Mongolia, can be up and running as soon as possible.
GCL chairman Gongshan Zhu says, “We recognize that Linc Energy is the world leader in UCG with proven technology and technical capability to beneficiate coal resources via its UCG process and produce value added clean diesel and aviation fuels via GTL processing.
“The timing for this partnership is perfect as it provides an opportunity for the joint venture to make a valuable contribution to meeting China’s increasing energy demands. We are working closely with Linc Energy to close this transaction and look forward to a long and prosperous partnership.”
Linc is a globally focused, diversified energy company with a strong portfolio of coal, oil and gas deposits. The company has a focus on unlocking the value of its resources to produce energy to fuel the future, and has become the global leader in UCG. This process delivers a synthesis gas feedstock to supply commercially viable energy solutions – such as electricity, transport fuels and oil production – through gas turbine combined cycle power generation, GTL processing and enhanced oil recovery.
Linc has constructed and commissioned the world’s only UCG to GTL demonstration facility in Queensland, Australia, which produces the world’s only synthetic diesel fuel. The company also owns the world’s only commercial UCG operation, Yerostigaz in Uzbekistan, which has produced commercial UCG synthesis for power generation for 50 years.