Energy
Cougar Energy advances coal gasification deal in China
(Xinhua)
Updated: 2010-05-31 16:01
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CANBERRA: Australia-based company, Cougar Energy Ltd has advanced a deal with a Chinese firm today to cooperatively develop an underground coal gasification (UCG) project in the Inner Mongolia autonomous region of China.
The UCG process converts coal into gas, which can be used as a fuel for power generation or conversion into a range of petrochemical products, Cougar said.
Cougar said in a statement that it and Singapore-based investment partner Direct Invest Pte Ltd had signed a letter of intent with Inner Mongolia Qi De Investment Co Ltd.
The Chinese company is privately owned and has rights to a significant coal deposit in Inner Mongolia.
"The letter of intent outlines the intended commercial arrangements to develop the UCG project and sell the gas production," Cougar said.
"It is proposed that an offtake agreement for the gas will be negotiated with an independent power utility company, which will assume the task of funding, building and operating the electricity generation facility."
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Cougar managing director Len Walker said the deal was the first planned UCG project in China, which, like Australia, was reliant on coal but was seeking more environmentally friendly power generation.
"We are bringing our know-how and experience to these markets and currently assessing with several Chinese parties how to integrate UCG projects as part of their traditional coal mining operations," Walker said.
Cougar Energy Limited is focused on the development of electricity generation projects.
The company's flagship project is the Kingaroy power station in Queensland. Ignition and production of gas commenced in March but after a delay caused by well blockages, re-ignition is scheduled for the end of June or early July.