LNC - Linc Energy

[Jonathan111]

India Coal Mining Investment : India Nation Mining Company, CIL Plans To Complete Coal Mine Acquisition This Year

http://paguntaka.org/2009/10/06/ind...-to-complete-coal-mine-acquisition-this-year/


Coal India Ltd., the nation’s monopoly producer of the fuel, said it expects to complete a mine acquisition in the year ending March 31, and has hired Royal Bank of Canada to carry out due diligence on a deposit in Australia.

The state-owned company is seeking mines in the U.S., Australia, South Africa and Indonesia and as many as 52 companies want to be its partners, Chairman Partha S. Bhattacharyya told reporters in New Delhi today.

Coal India said Aug. 27 it may invest as much as $1.5 billion to acquire mines overseas to help overcome a shortage of the fuel as the country plans to almost double its power generation capacity by 2012. The company estimates a shortage of about 228 million tons a year of coal by March 2012.

Bhattacharyya and officials including Sriprakash Jaiswal, India’s junior coal minister, visited Australia in September to assess potential acquisition targets. About 15 companies with coal operations in Australia have signaled that they are interested in possible agreements with an Indian partner, Partha Sen, a business development manager for the Australian Trade Commission, said in Sydney Sept. 3.

Coal India secured two blocks in Mozambique that may hold a combined 1 billion metric tons of thermal coal, along with some coking coal, Bhattacharyya had said in a June 4 interview.

India’s coal demand is estimated to reach 731 million tons a year by March 2012, J. Goel, chief general manager of sales and marketing at Coal India, said Feb. 24. The company wants local mining approvals sped up to boost domestic output.

Companies including NTPC Ltd., Reliance Power Ltd. and Tata Power Co. plan to boost generation to meet demand in the world’s second fastest-growing major economy.

 

[Jonathan111]

Sudden movement..
I wonder who is buying?
Dont watch too long noirua...

Last Trade: 1.710 AUD
Change: 0.145 (9.27%)
Prev Close: 1.565
Open: 1.595
Bid: 1.700
Ask: 1.715
Day's Range: 1.590 - 1.740
52wk Range: 1.310 - 2.680
Volume: 6,398,293
Avg Vol (3m): 1,331,360

 

[Kent1810]

Yep,
Look good for today price and volume. Selling Coal assets news must be leaking. Time to get on board I think.

 

[awg]

If Deloitte's valuation of Felix Resources has anything to go by, directors wanted to cash in their chips, then a price around A$1.0 to A$1.2 billion for all three mines and tenements can be expected, imho.

Market cap at A$1.56 is A$784 million but LNC are a quite complex company these days and valuation depends on many estimates or perhaps guesses.

I don't hold any stock but I'm watching very closely.

The current market price values Lincs GTL and other technologies at less than zero.

Some contend they have potentially worlds best.

I am sure an astute investor such as yrself is familiar?

 

[Jonathan111]

Looks like he had a big day, late night presentation in New York..

http://www.brr.com.au/event/64901/partner/redfm

Thinking they might get 1.7b - 2b or 1b -1.5b + royalties

1b-1.2b Galilee
530m-600m Emerald
150m Pentland

Sounds like he was going to say "get rid" of the assets, he must be getting fed up of this sale or just a late night for PB..

$28-30 a barrell, produced in six minutes, 500meters of processing pipes
$1/GJ

PB has roughly about 10 drill crews working at one time to increase reserves

Any chance of upgrading the plant to 60000 barrells per day?

 

[profitmann]

Will take 5 years to get a 5,000 bbl GTL Plant up and running. 60,000 bbl....you are kidding...will never happen!!!. Try $40-$45 per barrel cost price today so guess what....the price in 2015 will be what???....and the transportation costs.....and the off take agreements - who?.....BP yes...who else???.....do the maths!!!

 

[Jonathan111]

Yes i read about Shell's Pearl project and the 19 billion blowout.

But their plant is huge compared

 

[Smurf1976]

It's not just production costs, but what price the liquid fuels sell for.

A simple question for all here on ASF. Who right now has an oil-fired (not oil filled but electrically heated) heater in the lounge room? They were very common 30 years ago. You know, the old Vulcan heater with a big tank on the wall outside filled with "heating oil".

And who is right now using electricity from a grid substantially reliant on oil-fired generation? Not much of that around these days, it's coal, nuclear, hydro, gas these days plus a bit of wind depending on your location.

My point is simply that underlying demand for transport, petrochemicals etc continues to rise with population, industrialisation of China etc whilst the easy demand destruction, like switching to other fuels for heating houses and generating power, is largely already done.

Anyone here work in a factory that still has an oil-fired boiler in use? Wouldn't have been hard to find someone working in such a place 20 or 30 years ago. Now gas is the usual fuel for such things, sometimes coal.

Or even someone working in an office building heated by oil? That too was common at one point - look carefully around city streets and you can still spot the tank filling points in many instances. In 2010 it's usually gas or electricity that provides the heat, not diesel or fuel oil.

So, rising demand, flat production from conventional sources, and the easy demand shifting to alternatives has already been done. That sounds like higher prices ahead to me...

 

[ColB]

Just a quick reply Smurf as heading out for dinner but I believe LNC's Liquid fuel is a high quality Diesel that I would have thought will be in demand for years to come not neccessarily as a heating fuel but mainly transport.

Another feature of their fuel is its intended use in the aviation industry [jetfuel].

I don't think they'll have planes running on gas in the near future but I could be wrong.

Once LNC get the coal sale through you would think they will have a GTL plant up and running within 2-3 years not 5 as has just been suggested.

Enjoy your usual informative posts Smurf.

Have a good one

 

[namrog]

Looks like he had a big day, late night presentation in New York..

http://www.brr.com.au/event/64901/partner/redfm

Thinking they might get 1.7b - 2b or 1b -1.5b + royalties

?

Think you're right about the big day Jonathon,, !!


What an unprofessional presentation from Peter Bond, must have been on the juice all day, so much huffing, puffing, uming, awing, unsure of figures etc....

Also looks to me like there is little more than 1 billion on offer for all the coal sale assets, and I feel he is probably going to take it, though all said and done , that wouldn't be such a bad thing....?

Gotta say as a shareholder, not very impressed with the presentation....

My Oppinion only though, others may have seen it differently...

 

[calais]

Spot on namrog, I think he had a few too many waiting for his turn.

Scratching his head, walking away from the microphone and I think one of his
comments ( 11.40 of presentation ) did he say " F and sense to put the two together".

I did have a laugh though and enjoyed the presentation.

The sale of the coal tenements seems to be between 1.4 to 1.7 billion.

Anyone willing to guess the capital cost of the Orrorroo, maybe 300-500 million. ( including power sration ).

 

[Smurf1976]

Just a quick reply Smurf as heading out for dinner but I believe LNC's Liquid fuel is a high quality Diesel that I would have thought will be in demand for years to come not neccessarily as a heating fuel but mainly transport.

Another feature of their fuel is its intended use in the aviation industry [jetfuel].

I should have explained that post a bit better.

Go back to 1973 before the first oil crisis. 50% of developed world energy was from oil, a figure that had been rapidly rising since the late 1950's when vast amounts of cheap Middle East (and elsewhere) oil became available.

It took less than a decade for that cheap oil to almost totally replace coal apart from steel production and power generation (though many newer plants were being built to use oil and quite a lot of coal-fired plants did get converted to oil).

By 1973, either you had hydro, locally produced gas at very low prices, were running an old plant (factory, power station, whatever) or you were using oil. Oil as a fuel was everywhere - even in the home with the very popular (at the time) oil burning heaters widely used where gas wasn't available (and sometimes even where it was available). Look around Tasmania, where those heaters were so popular as to become a major energy user in their own right, and a lot of houses still have the old tank on the wall and flue through the roof as evidence of the heaters that were there 30 years ago (the tanks being too heavy to easily remove and often quite high up on the wall).

Then it all changed as oil became expensive. Here in Tas there were 60% year on year drops in heating oil consumption at one point - that's a truly massive shift. Meanwhile WA gained international attention for the speed at which they shifted power generation from oil to coal. Then Victoria simply closed their oil-fired power plants completely, never to be restarted.

And right around the world, a nuclear and coal-fired power construction frenzy emerged, hence much of the electricity today comes from plants that were commissioned in the 1980's in response to 70's oil price shocks. The expansion of Muja (coal-fired power plant, WA) was a direct response to soaring oil prices, as was the controversial attempt at damming the Franklin River to expand hydro-electricity in Tasmania. Meanwhile in Darwin they simply replaced their entire power generation with gas (an option which Tasmania, and believe it or not WA, didn't have available at the time).

In short, it was technically very simple to convert from oil power / heating / boilers to coal and natural gas plus a bit of nuclear and a few hydro-electric dams (globally). Apart from a few flare ups over environmental issues, mostly relating to hydro or nuclear, it wasn't overly difficult. Just run factory boilers on coal / gas, heat buildings with gas and shift remaining non-transport oil use to electricity, to be provided by the new coal, nuclear etc plants. All fairly simple.

But that's all done now. Apart from transport, which can not easily be converted to another fuel, we don't actually use that much oil these days in terms of the range of applications for it. The oil-fired heaters, power stations, boilers etc are largely gone (almost completely gone in Australia) which leaves transport as the major use of the 85 million barrels per day of oil that the world consumes.

So what happens now when prices rise? There's no quick fix. It's not simple to run cars, trucks and buses on anything but oil. We're basically stuck with it, a very different scenario to the 1970's. Hence as demand rises from China etc and production in due course peaks, higher prices seem inevitable - we just don't have an "easy" way out this time.

All of that ought to lead to higher liquid fuels prices ahead and hence opportunities for companies such as LNC. The only real risk that I can see is if the Saudi's etc really do have as much oil as they say and are willing to pump flat out to keep prices down (possible but a great many people seriously doubt it) or the global economy falls in a hole and stays there. Other than that, we're stuck with liquid fuels and, in my opinion, increasing prices in the years ahead - there's just no easy way out now other than to find alternative ways (such as what LNC are doing) to produce such fuels. We can't build a coal-fired aeroplane or run trucks on nuclear power...

 

[bloubul]

The only real risk that I can see is if the Saudi's etc really do have as much oil as they say and are willing to pump flat out to keep prices down (possible but a great many people seriously doubt it) or the global economy falls in a hole and stays there. Other than that, we're stuck with liquid fuels and, in my opinion, increasing prices in the years ahead - there's just no easy way out now other than to find alternative ways (such as what LNC are doing) to produce such fuels. We can't build a coal-fired aeroplane or run trucks on nuclear power...

Smurf.. Interesting article in SMH this morning http://www.smh.com.au/world/oil-reserves-exaggerated-by-one-third-20100323-qtue.html quoting that Oil Reserves could be overstated by 1/3. If these figures are correct and PB gets the sale through asap and start building commercial GTL plants, Liquid Gold could be flowing just as demand outstrips supply in 4-5 years.

 

[Mickel]

LNC have secured additional funding of up to A$81.5 M through a US Fund Manager.

http://www.asx.com.au/asxpdf/20100330/pdf/31pjvk0ll2m59b.pdf

This will ease the pressure on LNC to finalise the Coal Sale within 4-6 weeks, as they run down their working capital.

My view is that P Bond is unwilling to sell the 3 coal assets at bargain basement prices. This was stated at the Limelight presentation in Brisbane on Fri 26/3 by Craig Ricato. I think they may wait until a new JORC statement on Galilee is made which will hopefully increase the value of Galilee. The JORC statement was due in April but with recent wet weather, it is more likely in May or early June.

 

[qq830821]

LNC have secured additional funding of up to A$81.5 M through a US Fund Manager.

http://www.asx.com.au/asxpdf/20100330/pdf/31pjvk0ll2m59b.pdf

This will ease the pressure on LNC to finalise the Coal Sale within 4-6 weeks, as they run down their working capital.

My view is that P Bond is unwilling to sell the 3 coal assets at bargain basement prices. This was stated at the Limelight presentation in Brisbane on Fri 26/3 by Craig Ricato. I think they may wait until a new JORC statement on Galilee is made which will hopefully increase the value of Galilee. The JORC statement was due in April but with recent wet weather, it is more likely in May or early June.

Mickel,
i too attended the presentation. However, i didnt feel confident at all after the presentation. there is no news on g4 there is no news on their technology developlment. i also asked the CFO after the meeting and he doesnt know anything about the cost of producing liquid.

 

[Mickel]

Mickel,
i too attended the presentation. However, i didnt feel confident at all after the presentation. there is no news on g4 there is no news on their technology developlment. i also asked the CFO after the meeting and he doesnt know anything about the cost of producing liquid.

Regarding the cost of producing liquids, some idea is given by the BBY analyst report of 14/10/08- http://www.lincenergy.com.au/pdf/analyst-18.pdf -
where they stated (estimated) $900 million construction cost, $93m opex and $545m EBITDA in 3rd year of production for a 20,000 bpd plant, with a barrel of oil (boo) selling price of AUD $93.75

While this estimation is 18 months old, there have been some improvements in their research and big improvements in Gas Generator 4 . Of course LINC are initially planning to build a power station, incorporating cutting edge technology, and generate an early income stream in Sth Aust.

Also, you may recall that Kobus Treblanche, in answer to a question, stated that G4 would produce 1.66 boo from 1 ton of coal + a further energy equivalent of .31 boo. This is a huge increase from the originally stated 1 boo from 1 ton of coal.

From the latest half year report-

Gas To Liquids (GTL)
The GTL demonstration plant has undergone a complex programme of multiple modifications, largely to the Fisher-Tropsch
area, including some significant modifications to the catalyst reduction system. These modifications were completed on
schedule and within budget and are designed to replicate laboratory reduction conditions, which have confirmed that they
would deliver further enhancement to gas conversion in the demonstration plant.

South Australia
On 6 November 2009, Linc Energy announced plans to establish its first UCG to GTL commercial operation in Orroroo,
South Australia. The announcement was supported by the discovery of a significant 1.0 to 1.3 billion tonne coal exploration
target (in accordance with the JORC code). An initial area of land has been purchased and management estimates that the
size of the deposit indicates it may be sufficient to support 500MW of high efficiency power generation, in addition to 20,000
barrels per day of clean, synthetic fuels production with an operational life for the combined UCG and GTL facilities of about
75 years.

AFC Energy
ln December 2009 Linc Energy announced it signed an exclusive agreement with UK-based fuel cell technology company
AFC Energy Plc and its related entity Bg Coal. The agreement provides Linc Energy with worldwide exclusive rights to utilise
and operate AFC fuel cells with its UCG application for a 24 month period, with an option to extend for up to three years. The
first stage of the agreement involves Linc Energy purchasing an Alpha Fuel Cell System for GBP 200,000 for testing at its
Chinchilla Demonstration Facility.

 

[Mickel]

Further to my last post, here is some information about AFC Energy/LINC Energy
agreement from the AFC website -

AFC Energy reaches first milestone in Coal Gasification Agreement

Monday, February 22nd, 2010

AFC Energy reaches first milestone in Coal Gasification Agreement

Alpha unit ready for shipping, stage payment due, additional partners secured

AFC Energy (AIM: AFC), the developer of low cost alkaline fuel cells that generate clean electricity from hydrogen feedstocks, is delighted to announce that, further to its initial announcement on December 8th 2009, it has reached the first milestone under its agreement with Linc Energy Limited (ASX: LNC, Market Cap: cA$717m) and with B9 Coal Limited.

Linc Energy Limited (‘Linc’ or ‘the Partner’) is Australia’s leader in clean coal technology, and intends to integrate the AFC fuel cell system for use in its global Underground Coal Gasification (“UCG”) projects.
The combination of cheap and easy-to-produce synthetic hydrogen from UCG will make an ideal feed source for AFC Energy’s fuel cell systems. Linc Energy will utilise a simple membrane gas separation process on the UCG gases to ensure a satisfactory rich hydrogen mix is available for feed-in to the fuel cell system.

In the two months since signing the agreement, AFC Energy has already configured and assembled an Alpha fuel cell system which is now ready for shipping to the first demonstration site, an operating UCG plant in Chinchilla, Australia. As such, the first payment is now due from Linc to AFC Energy.

Upon commissioning and successful trials of the Alpha unit, it is intended to install multiple modules at Chinchilla to form a larger c.50 kW AFC fuel cell system. All parties anticipate multiple installations of AFC Energy’s 50kW system for full scale commercialisation.

Key terms of the agreement with Linc Energy are as follows:

* AFC Energy has granted to Linc Energy worldwide exclusive rights to utilise and operate AFC Fuel Cells in conjunction with any UCG application for a period of 24 months
* Linc Energy will purchase the first Alpha fuel cell system for £200,000, payable in instalments, with delivery anticipated within the next five months
* Linc Energy will have the option for 24 months to extend the exclusivity period in perpetuity. To exercise this option Linc must invest £2.3 million in AFC Energy at a price determined in reference to the market price at the time of exercise
* For Linc Energy-owned sites, Linc Energy will pay to AFC Energy an upfront payment calculated on the cost of delivery of fuel cell systems, and a royalty based on profits generated from the use of AFC Energy fuel cells
* For Linc Energy-owned sites Linc Energy will pay to B9 Coal Limited, as introducer and broker to the transaction, a royalty equal to two percent of the net profits generated from the use of AFC Energy fuel cells

The operational system will permit the optimal usage of coal with minimal environmental damage. The project capital expenditure for power stations using AFC Energy’s low cost fuel cell system is forecast to be less than that of conventional coal/IGCC power stations.

Ian Balchin, CEO of AFC said: “The Underground Coal Gasification opportunity securedthrough B9 Coal with Linc Energy is by far the largest potential market identified yet for AFC’s low cost fuel cell technology. It is operational practically anywhere in the world where there are deep coal deposits and can create a ‘Holy Grail’ for future coal utilisation, with low-cost, highly efficient conversion of coal into power. When combined with Carbon Capture and Storage, this combination of AFC and Linc’s innovative technologies can turn the dirtiest fossil fuel into the cleanest.

“We are very excited about working with Linc Energy and locking into the dynamism that has made them one of the fastest growing companies in Australia over the past few years. In parallel with our chlor-alkali opportunity, this programme enables AFC to demonstrate the increasingly wide application potential of its low-cost fuel cell technology”.
Mr Peter Bond, CEO of Linc energy said: “It makes infinite sense to marry the cleanest power generation technology with the cleanest gasification technology. The picture of success is that you have a UCG field producing cheap and efficient UCG gas, subsequently this UCG gas is piped above ground a short distance upon the same gas field, adjacent to the fuel cell installation. There the gas is cleaned and put through a membrane to enhance the hydrogen percentage that is fed into a smart and compact Fuel Cell power-generation facility that produces virtually no CO2 emissions. In fact the by-product that this power generation plant does produce is in high demand, and that is clean distilled water. The green power produced will then be fed into the local transmission grid. The future of this concept is simply staggering. It could easily be the ultimate answer for clean coal power many of us are looking for, and it’s only one to two years away from commercial reality.”

http://www.afcenergy.com/press-rele...rst-milestone-in-coal-gasification-agreement/

 

[profitmann]

Further to my last post, here is some information about AFC Energy/LINC Energy
agreement from the AFC website -

AFC Energy reaches first milestone in Coal Gasification Agreement

Monday, February 22nd, 2010

AFC Energy reaches first milestone in Coal Gasification Agreement

Alpha unit ready for shipping, stage payment due, additional partners secured

AFC Energy (AIM: AFC), the developer of low cost alkaline fuel cells that generate clean electricity from hydrogen feedstocks, is delighted to announce that, further to its initial announcement on December 8th 2009, it has reached the first milestone under its agreement with Linc Energy Limited (ASX: LNC, Market Cap: cA$717m) and with B9 Coal Limited.

Linc Energy Limited (‘Linc’ or ‘the Partner’) is Australia’s leader in clean coal technology, and intends to integrate the AFC fuel cell system for use in its global Underground Coal Gasification (“UCG”) projects.
The combination of cheap and easy-to-produce synthetic hydrogen from UCG will make an ideal feed source for AFC Energy’s fuel cell systems. Linc Energy will utilise a simple membrane gas separation process on the UCG gases to ensure a satisfactory rich hydrogen mix is available for feed-in to the fuel cell system.

In the two months since signing the agreement, AFC Energy has already configured and assembled an Alpha fuel cell system which is now ready for shipping to the first demonstration site, an operating UCG plant in Chinchilla, Australia. As such, the first payment is now due from Linc to AFC Energy.

Upon commissioning and successful trials of the Alpha unit, it is intended to install multiple modules at Chinchilla to form a larger c.50 kW AFC fuel cell system. All parties anticipate multiple installations of AFC Energy’s 50kW system for full scale commercialisation.

Key terms of the agreement with Linc Energy are as follows:

* AFC Energy has granted to Linc Energy worldwide exclusive rights to utilise and operate AFC Fuel Cells in conjunction with any UCG application for a period of 24 months
* Linc Energy will purchase the first Alpha fuel cell system for £200,000, payable in instalments, with delivery anticipated within the next five months
* Linc Energy will have the option for 24 months to extend the exclusivity period in perpetuity. To exercise this option Linc must invest £2.3 million in AFC Energy at a price determined in reference to the market price at the time of exercise
* For Linc Energy-owned sites, Linc Energy will pay to AFC Energy an upfront payment calculated on the cost of delivery of fuel cell systems, and a royalty based on profits generated from the use of AFC Energy fuel cells
* For Linc Energy-owned sites Linc Energy will pay to B9 Coal Limited, as introducer and broker to the transaction, a royalty equal to two percent of the net profits generated from the use of AFC Energy fuel cells

The operational system will permit the optimal usage of coal with minimal environmental damage. The project capital expenditure for power stations using AFC Energy’s low cost fuel cell system is forecast to be less than that of conventional coal/IGCC power stations.

Ian Balchin, CEO of AFC said: “The Underground Coal Gasification opportunity securedthrough B9 Coal with Linc Energy is by far the largest potential market identified yet for AFC’s low cost fuel cell technology. It is operational practically anywhere in the world where there are deep coal deposits and can create a ‘Holy Grail’ for future coal utilisation, with low-cost, highly efficient conversion of coal into power. When combined with Carbon Capture and Storage, this combination of AFC and Linc’s innovative technologies can turn the dirtiest fossil fuel into the cleanest.

“We are very excited about working with Linc Energy and locking into the dynamism that has made them one of the fastest growing companies in Australia over the past few years. In parallel with our chlor-alkali opportunity, this programme enables AFC to demonstrate the increasingly wide application potential of its low-cost fuel cell technology”.
Mr Peter Bond, CEO of Linc energy said: “It makes infinite sense to marry the cleanest power generation technology with the cleanest gasification technology. The picture of success is that you have a UCG field producing cheap and efficient UCG gas, subsequently this UCG gas is piped above ground a short distance upon the same gas field, adjacent to the fuel cell installation. There the gas is cleaned and put through a membrane to enhance the hydrogen percentage that is fed into a smart and compact Fuel Cell power-generation facility that produces virtually no CO2 emissions. In fact the by-product that this power generation plant does produce is in high demand, and that is clean distilled water. The green power produced will then be fed into the local transmission grid. The future of this concept is simply staggering. It could easily be the ultimate answer for clean coal power many of us are looking for, and it’s only one to two years away from commercial reality.”

http://www.afcenergy.com/press-rele...rst-milestone-in-coal-gasification-agreement/

What if the Syngas doesn`t hold enough Hydrogen even though it goes through an "enhancing stage" to run the Alpha Fuel Cell?
Anyone costed the "enhancing stage" as yet?

 

[Jonathan111]

http://www.coalonline.net/catalogues/coalonline/82189/7180/html/7180.html
Very indepth viewpoint in this academic Article; 129 pages

In early 2000, Linc Energy carried out an UCG trial in a block of coal 140 m deep in the Surat basin in Queensland. The UCG technology used involved vertical wells and hydraulic fracturing and reverse combustion linkages was used, under a licence from Ergo Exergy (for the εUCG technology). Syngas was produced for just over two years from a seam that was more than 8 m thick. More than 35,000 t of coal was gasified using air as the oxidant, producing some 80 Mm3 of gas with a heat content varying from 4.5–5.7 MJ/m3. The coal used is a top end subbituminous coal with an ash content of 28% and perhaps a little higher. In terms of its quality and distance from an export terminal it is regarded as ‘stranded’ coal with low potential for use in the export market. The pilot burn involved nine injection/production wells during the period, and there were nineteen monitoring wells to assess any changes in the groundwater. The timeframe for the project was as follows: l November 1997, site selection; l September 1999, design for the pilot burn complete; l December 1999, construction complete for the pilot burn. The first gas was produced and flared; l June 2002, after more than two years operation, the controlled shut-down of the underground pilot reactor was completed. There was an extensive environmental assessment made following the shut-down, and no deleterious impacts were found. It should be noted, however, that the area of coal involved was quite small, covering an area of only some 30 m by 100 m. As the UCG reactor is operated below the surrounding hydrostatic pressure, in principle, nothing leaves the process other than through the production well. The reactor chamber was surrounded by a number of monitoring wells with sample points and piezometers measuring the hydrostatic head. At the end of the two-year programme, and as part of the shut-down procedure, the reactor was blown through as it cooled down to remove any residual pollutants, using the ‘clean cavern’ approach discussed in Chapter 3. Since the initial trial there have been changes in the management, and the company is operating independently of the εUCG technology and Ergo Exergy, to whom they were previously licensed. In May 2006, Linc Energy became a company listed on the Australian Stock Exchange. Linc Energy have been quite commercially aggressive, commonly mentioning their share value during technical presentations, and they have been successful in raising considerable amounts of capital to fund their projected developments. The original business plan was to use the syngas for power generation, but in view of the relatively low
price for electricity in Queensland, Linc Energy decided to pursue the policy of producing higher value products. This involves a considerably increased technical risk as syngas to liquids (STL) processes are less forgiving of variations in the syngas quality than turbine based power generation. Linc Energy commissioned an external study by PriceWaterhouseCoopers to assess the prospects for UCG, which was published in May 2008, and is available on the Linc website (Linc, 2008b). During the period after Linc Energy’s public listing, the focus of activities has been to establish the conditions for an air-blown UCG panel to deliver syngas to a syngas-to-liquids (STL) process development unit (PDU). Following extensive assessments, a new coal panel was set up for UCG, and a PDU for the production of Fischer-Tropsch liquids commissioned towards the end of 2008. The UCG development is based on linking an in-seam borehole with vertical wells, and not on the Russian εUCG system. Using this method, the in-seam hole(s) provide the linkage routes between vertical injection and production wells, and hydraulic fracturing will no longer be needed. The main aim of the trial is to supply air-blown gas of sufficient quality and quantity for the PDU. The syngas has a typical composition (on a nitrogen free basis) of H2 32%; CO 17%; CH4 18% and the H2/CO ratio of 1.88 is ideal for the Linc syngas to liquids process. In ten months some 2000 t of coal has been gasified, representing about 7 t/d. In May 2009 a controlled shut-down of the generator was started. The depressurisation and rehabilitation of UCG reactor cavities at the end of their operational life is a process that will have to be carried out many times during commercial-scale UCG operations, and Linc Energy will use the current experience to refine the cavity cleaning techniques used, to achieve the best possible environmental and operational outcomes (Minotti, 2009). After initial discussions with different syngas-to-liquids (STL) technology providers and several months of R&D carried out at the University of Kentucky’s Center of Applied Energy Research (CAER) the STL pilot plant was finally designed in South Africa by local engineering companies. At CAER a syngas with a similar composition to that produced from UCG at Chinchilla was used as the feedstock to determine the best catalyst to use (cobalt), as well as the operating temperatures and pressures applicable. The pilot plant is over 70 m long and eight stories high. It includes the facilities for syngas clean-up, compression, two FT fixed tube reactors and basic distillation equipment to separate the different fractions, including diesel. The PDU has the capacity to produce some 5 to10 bbl/d and is intended to establish the practicality of producing liquid fuels from an UCG operation. Linc Energy currently operates under a Queensland Government Mineral Development Licence. However, in view of the dispute referred to earlier, and the probability that the Queensland government would give priority to CBM as an established technology over UCG which is developing, Linc Energy decided to move its commercial-scale UCG/STL project to South Australia. One potential site is in the Arkaringa basin some 800 km northwest of Adelaide where there are very substantial coal resources, and the basin is said to contain one of the largest contiguous coal deposits in the world (Coober Pedy, 2008). Some of the necessary exploration has already been carried out by Sapex Ltd (Sapex, 2007). To facilitate the development, Linc Energy acquired Sapex Ltd, giving Linc Energy access to large coal exploration areas in South Australia. The coal is subbituminous with typically 38% moisture, 11% ash and 1% sulphur. The costs involved are not inconsiderable, and Linc has already spent some A$50 million at Chinchilla, while the Sapex takeover involved A$104 million (Syngas Refining, 2008b). Developments at Arckaringa by Altona Resources were already under way with proposals for a conventional mining operation with an on-site CTL plant. A pre-feasibility study has been completed, and a bankable feasibility study is currently being prepared. As reported in Couch (2008) the plans are for a 10 Mt/y open cut mine to supply, initially, two 15,000 bbl/d liquid product streams together with a power plant with 560 MWe of export power. This is quite separate from the Linc Energy plans. The transfer of the Linc activity to Arckaringa would facilitate the use of otherwise ‘stranded’ coal there. It would presumably involve some additional exploration work, as the requirements for UCG are more stringent than those for conventional mining and the UCG activity might be in deeper seams than those targeted by Altona. It would also require a new pilot-scale UCG operation to establish the design basis for a commercial-scale expansion in the new coal seam. Amongst the challenges to be addressed will be the hydrogeology of the site and the use and disposal of water as it is in an area where water use allocation approvals are required. As the decision was only made in November 2008, detailed plans have not yet been published, although the area is said to have the potential to support several 100,000 bbl/d UCG/STL plants (Syngas Refining, 2008b; Coober Pedy, 2008). While the major expansion of Linc Energy’s activity is now planned to be at Arckaringa, it is intended to retain the research and development activity at Chinchilla. It is intended to start up a new UCG generator before the end of 2009. Drilling has already started in the deeper Taroom coal measures. These extend from 250 to 500 m deep, but at the time of writing the exact site for the next trial had not been chosen. Tests are planned to assess the effects on syngas production of the higher operating pressures which will be used, and of the use of oxygen, rather than air, as the oxidant. There will be enhanced reactor cavity groundwater monitoring, and the re-injection of water/steam will be assessed (Minotti, 2009). With the planning of the new UCG trial, discussions are well advanced on the conceptual design for a 20,000 bbl/d STL demonstration plant. This could provide the basis for a series of similar sized modules for the Arckaringa expansion. Linc Energy have a partnership arrangement with Vietnamese and Japanese companies to assess and possibly develop a UCG activity in northern Vietnam. A MOU was signed in 2008 with the Vinacomin (Vietnamese) and Marubeni (Japanese) companies relating to stage one of the project (Linc, 2008c). Vinacom is the Vietnam National Coal and Mineral Industries Group. At the time of writing it was reported that the contract to undertake the pilot trial in a potential UCG Tonkin development area in the Red river delta, had been signed (ABNnewswire, 2009b). Linc Energy has also signed a letter of intent with the Xinwen Mining Group in China relating to the development of a UCG/STL activity in the Yinan and Yibei coalfields in Shandong province (Syngas Refining, 2008c)....

 

[Smurf1976]

What if the Syngas doesn`t hold enough Hydrogen even though it goes through an "enhancing stage" to run the Alpha Fuel Cell?
Anyone costed the "enhancing stage" as yet?

You could always just use the gas to run a CCGT plant (conventional baseload gas-fired power station operating at about 55% efficiency) instead. That's very proven technology and pretty easy to get approval for in terms of environment etc.