Metex to commence $20M clean coal trial in Old

  Metex Resources Ltd has taken another important step in its evolution as a listed clean coal company, announcing that it had executed an agreement with leading engineering and project management group, Thomas & Coffey, enabling preliminary works to commence on a landmark $20 million Underground Coal Gasification (UCG) trial in south-east Queensland.Metex – which recently announced a $6 million share placement to underpin its activities – said yesterday that it had executed the contract appointing Thomas & Coffey of Brisbane as construction and project managers for the demonstration plant, which is to be located at Bloodwood Creek, 300km west of Brisbane. “This will enable Thomas & Coffey to commence preliminary works on construction of the planned UCG demonstration plant, subject to receipt of all necessary permits and approvals, early in the New Year,” commented Metex’s Managing Director, Ian Walker.“This marks another important milestone following our recent move to acquire 100% ownership of the UCG technology held through our joint venture with the CSIRO, Carbon Energy Pty Ltd (CEPL),” he added. “We look forward to the commencement of this landmark trial during 2008, which will be the largest of its kind ever undertaken in Australia.”Metex recently announced an upgraded Inferred Resource for its Bloodwood Creek trial site of 100 million tonnes of high-quality coal. This resource is estimated to contain approximately 2,000 petajoules of energy, with approximately 1,000 petajoules being potentially recoverable using CEPL’s UCG extraction technology.The Bloodwood Creek trial will be Australia’s largest UCG gas production demonstration, and will use CEPL’s proprietary UCG technology. This standard Carbon Energy UCG module will produce syngas at the rate of 1PJ (petajoule) per year, sufficient to provide up to 10MW of power per module.The technology involves drilling boreholes from surface to the underground coal seam, and gasifying the coal in-situ to produce a syngas suitable for conversion into feedstock for power generation, or for conversion into ultra-clean liquid fuels and chemicals. UCG promises to significantly reduce the cost of introducing new clean coal technologies, by cutting costs of the coal gasification phase. UCG replaces the coal mine and surface coal gasifier stages, which are both large capital items, thus reducing both costs and environmental impact.“The success of this trial will position Metex to become a significant energy company specialising in the development of UCG as a source of economic quantities of syngas suitable for power generation and coal for liquids opportunities,” Mr Walker added.CEPL has defined at least three commercial-scale development options for the project to be considered as part of the planned $20 million demonstration trial with different levels of capital expenditure, all offering the potential to generate substantial annual cash flows and returns.