Carbon Energy Limited (ASX:CNX) Underground Coal Gasification Panel 2 Operations Approved By Queensland Government
Brisbane, Feb 14, 2011 AEST (ABN Newswire) - Carbon Energy Limited (
ASX:CNX) (PINK:CNXAF) advises that it has received a notice to proceed from the Queensland Government Department of Environment and Resource Management (DERM) enabling the Company to initiate gasification of its new Underground Coal Gasification (UCG) Panel 2, with amended environmental conditions for its Bloodwood Creek site in Queensland. The documentation from DERM was received late on Friday 11 February after market close.
The amended conditions allow Carbon Energy to commence the operation of Panel 2 and to utilise the syngas produced for testing the Company's 5 MW power generator that has been installed at site to trial the commercialisation of Carbon Energy's world leading UCG technology.
The new conditions reflect recommendations from Carbon Energy's environmental reports to DERM in relation to handling process water. All recommended modifications were installed by the company during December and January.
In addition DERM has requested that additional ground water monitoring wells be installed, which reflects recommendations from the Government's Independent Scientific Panel (ISP) report. The ISP made a number of observations and recommendations in relation to Carbon Energy's operations including:
- "The company proved to be open and willing to engage with the ISP to ensure good understanding of its technologies, operating protocols, modelling capabilities and data from monitoring".
- "The documentation for the Environmental Evaluations is forthright in level of detail.... In general, the scope and level of detail is thorough, with all pertinent information included".
- The ISP also recommended that the "scale, nature and scope of the Carbon Energy pilot programme are appropriate" and that "there is no need to alter these factors".
- The ISP concluded that Carbon Energy should proceed with the controlled decommissioning of its UCG Panel
The full report from the ISP is available on DERM's website: http://derm.qld.gov.au
The Company has a drill rig commencing on site immediately to complete the additional water monitoring wells. This program is anticipated to take approximately 4 weeks to complete the drilling and install the monitoring equipment, at a cost of approximately A$150,000.
Upon completion of the additional monitoring wells, the Company will proceed with the commissioning of UCG Panel 2 and testing of the engines of the Company's 5MW power station.
Further amendments to the environmental conditions are required to move from the testing phase to full production. It is anticipated that these amendments will be progressed in parallel to the Company's commissioning activities and it is expected that full scale operation of the 5MW power station will commence in late May 2011.
The Company expects the following events/works schedule:
Mid February - Mid March 2011
- Installation of additional monitoring wells
Mid March- Mid April 2011:
- Initiation and commissioning of UCG Panel 2
- Establishment of consistent syngas flow
Mid April - End May 2011:
- Introduce syngas to engines and conduct engine testing
- Finalise environmental amendments to ramp up to full production
- Commission engines and ramp up power production
June 2011
- Export of electricity to the grid
Andrew Dash, Managing Director of Carbon Energy said "We are very pleased to have received the notice to proceed with our activities. We believe the rigorous audit and reporting process we have undertaken supports our claim of developing UCG as an environmentally safe and industry leading technology".
"We will now focus our energies on the start-up of Panel 2 and the commissioning of our 5 MW power station. When operational this will be the first power project in Australia to be delivering power to the grid from UCG syngas".
Further project updates will be provided over the coming months as key milestones are achieved.
About Carbon Energy Limited
Carbon Energy (ASX:CNX) (OTCMKTS:CNXAY) is building a gas business, utilising its unique keyseam technology.
The Company is committed to providing industrial gas users with an affordable and secure source of high quality feedstock, as gas prices remain strong, through increased demand across our key markets.
Carbon Energy is the only company to complete a full-lifecycle, commercial scalable underground gasification trial. The Company's keyseam technology has successfully accomplished all the recommendations outlined by the Queensland government's Independent Scientific Panel (ISP) which included intense, independent environmental scrutiny.
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