Melbourne-based company Cougar Energy has signed a Memorandum of Understanding (MoU) with an Indonesian mining company to identify and assess coal deposits in the country that may be suitable for Underground Coal Gasification (UCG).
The MoU with PT Medco Energi Mining Internasional means a preliminary study for the commercial development of the deposits will be undertaken and also makes way for the potential creation of a joint venture for development of any credible projects.
Cougar Energy says it is pleased to be aligned with a commercial partner of substance in Indonesia. Medco Energi is based in Jakarta and is a subsidiary of PT Medco Energi Internasional Tbk, which owns a range of energy interests including domestic and international oil and gas operations.
Both companies are intent on bringing the UCG process into Indonesia’s mainstream energy supply industry.
UCG converts coal in situ into a combustible gas that can be used as a fuel or a chemical feedstock. The process can be used to exploit coal resources that are either uneconomic to work by conventional open cut or underground mining or are inaccessible because of depth, geology or safety considerations.
Cougar’s managing director Dr Len Walker says the process is initiated by drilling two adjacent boreholes into a coal seam and then injecting an oxidant such as air or oxygen mixed with steam into one of the holes and igniting it. The hot combustion gases flow through the coal towards the other hole, with the resulting chemical reactions converting the coal to a gas which can then be extracted. He says the cost of the gas per unit of energy is much lower than natural gas and coal-fired power.
Medco Energi’s affiliate has a current power generation of about 200MW and hopes the UCG technology will supplement the output. The company believes there is an immediate need for cheap and clean power sources to be developed using Indonesian coal resources. Both companies have already identified coal resources for assessment.