Linc Energy Limited (ASX:LNC) Starts Up Gasifier 5, World First UCG Multi-Panel

Brisbane, Oct 24, 2011 AEST (ABN Newswire) - Linc Energy Ltd (ASX:LNC) is pleased to announce the completion and start-up of its fifth gasifier at Chinchilla, Australia, which was commissioned and producing UCG Syngas at approximately 1800 hours on Saturday 22 October 2011. This represents the final phase in the technological development of Linc Energy's UCG technology prior to its commercial roll-out.

Gasifier 5 will run simultaneously with Gasifier 4 which has been in continuous operation since February 2010. Gasifier 4 has converted more than 10,000 tonnes of coal, producing more than 40 million cubic metres of syngas at Linc Energy's Chinchilla facility.

This commencement of Gasifier 5 operations places Linc Energy in the unique position of having two separate facilities (Chinchilla and Yerostigaz (Angren)) with multiple gasifiers in operation. The Chinchilla operation is the first of its kind in the western world to operate multi-panel UCG gasifiers.

Gasifier 5 is 132 metres deep and 820 metres long, making it the longest gasifier in the world and the longest designed by Linc Energy to date. Linc Energy's aim is to average in excess of 1,000 metres in length for each gasifier in its commercial operations.

Gasifier 5 incorporates the application of proprietary oxygen injection equipment to enable production of higher quality synthesis gas for optimising GTL and other downstream plant designs.

It is estimated Gasifier 5 will produce up to 480 gigajoules of energy during the two to three years life expectancy, and gasify 24,000 tonnes of coal depending on the level of oxygen enrichment. The estimated single cavity width is 16 metres within a coal seam height of 5.5 metres.

It is the most instrumented gasifier ever built, with more than 120 thermocouples and a hydrogeological monitoring network with instrumentation cabling of almost 30 kilometres.

"The sheer distance from the point where air is injected and the product syngas is produced is significant because it has never been done here before. Linc Energy has pushed the design for longer gasifiers enabling the conversion of more coal per horizontal well, thereby significantly reducing the cost of syngas production," Linc Energy's Chief Executive Officer, Peter Bond, said.

"This gasifier will provide Linc Energy with the most comprehensive UCG data set anywhere in the world, making it invaluable for our UCG model calibration and verification. This will allow us to continue to perfect the technical evaluation methods we have developed over the years to assist us in assessing commercial opportunities for UCG operations around the globe, which in turn allows the Company to be confident of the economic and environmental performance of commercial UCG projects prior to start-up," Mr Bond said.

Gasifier 5 has advanced design methodologies and technologies specially tailored to support UCG for the roll out of Linc Energy's commercial EOR and GTL energy applications. Some of the attributes of the Fifth Generation of Technology are:

- Advanced site characterisation of the coal and overburden geology and hydrogeology using more detailed and more comprehensive techniques than previously available;

- Fifth generation gasifier design creates significantly more UCG gas flows which lowers gas cost;

- Proprietary horizontal well completions to facilitate multiple ignition points and continuous syngas quality control;

- New wellhead design catering for instrumentation capillaries and coil tubing insertions;
- Comprehensive and state-of-the-art measurement of gasifier temperature, pressure and other key variables to calibrate UCG models for commercial operation;

- Capability to allow evaluation of multi-gasifier water interaction;

- Ability to demonstrate production well quenching designs for syngas temperature and quality control;

- Demonstration of extensive environmental monitoring and control capabilities;

- Subsurface measurement of temperature, pressure and groundwater quality in the coal seam and surrounding formations; and

- Improved process control and automation.

Core to Linc Energy's approach to UCG has been to develop a fundamental understanding of the gasification process. The Company has invested in the development of a series of proprietary software models to predict and control the process and to maximise gasifier performance. This has included models for site selection, groundwater flow and monitoring, sub-surface subsidence, cavity growth and syngas quality. Linc Energy is now the world leader in UCG modelling and is continuing to develop tools which will provide the ability to monitor sub-surface UCG operations in real time, ensuring immediate feedback for its modellers.

The Chinchilla Demonstration Facility has over 100 monitoring wells used for pressure measurement (using piezometers) and groundwater sampling. Since the beginning of Linc Energy's operations, over 20,000 groundwater samples have validated the Company's strong environmental performance. Linc Energy's water treatment facility in Chinchilla is capable of treating up to 24,000 litres per day of process water and work is currently planned to further expand this facility both in size and efficiency.

"We have developed and operated successive UCG gasifiers, a GTL demonstration plant, oxygen injection, coil tubing equipment, and a wastewater treatment plant at the Chinchilla facility. To think that this generation of UCG technology, used in the development of Gasifier 5, is designed to produce 78.8 million cubic metres of syngas over its life with the energy equivalent of 89,000 barrels of oil, is very exciting. In fact it is exactly where we need to be to create a commercial UCG operations model," Mr Bond said.

"These latest achievements, combined with a long heritage of UCG operating experience, means Linc Energy is uniquely positioned with UCG capabilities that are ready to be deployed in commercial operations for clean energy and fuels applications around the world. When you overlay that capability with the Company's established global coal footprint, that's when things really get exciting!"

Contact

Information for Media: Heather Stewart Media Manager Phone: +61-7-3248-8904 E-mail: heather.stewart@lincenergy.com ASX Contact: Brook Burke Company Secretary Phone: +61-7-3229-0800 E-mail: brook.burke@lincenergy.com Information for Investors: Justyn Peters General Manager Investor Relations Phone: +61-7-3229-0800 E-mail: justyn.peters@lincenergy.com http://www.lincenergy.com