Update on GCL Joint Venture in China
Brisbane, June 29, 2012 AEST (ABN Newswire) - Linc Energy Ltd (
ASX:LNC) (OTCQX:LNCGY) is pleased to provide an update on the progress to finalise the proposed joint venture arrangements with GCL Projects Limited ("GCL"), a subsidiary of Golden Concord Group Limited, to commercialise Underground Coal Gasification ("UCG") to Gas to Liquids ("GTL") in the People's Republic of China ("China").
Since announcement of the entry into the Commercial Terms Deed in April 2012, GCL has completed the "Technical Due Diligence" and both companies are progressing towards completing the last few points of negotiation across the legal documentation.
Linc Energy and GCL are actively working through the legal documentation, with both companies working with their respective leading legal firms to facilitate this, which covers issues from Intellectual Property access and protection, through to site selection and work programs. Linc Energy and its team will be aiming to complete this work with GCL over the coming weeks to ensure an early construction start date for the UCG operation in China.
The current preferred coal location is a large coal area, within Inner Mongolia, owned by GCL. There is substantial data with respect to this coal location and it is hoped that site drilling to finalise the location will commence soon after the contract has been finalised.
Mr Peter Bond, Linc Energy's Chief Executive Officer, said, "We are very happy with the relationship with GCL. Each company has hosted the other in recent times as we continue to work through the outstanding legal documents. Whilst these discussions are taking a little longer than expected, it was always going to take time given the size and nature of this transaction. We remain confident that the deal will conclude in the second half of 2012."
"Importantly, in parallel with the legal negotiations, the parties are working to finalise selection of the preferred initial site in order for GCL to fast track permitting and ensure that the joint venture's UCG operations in China, which will probably be in Inner Mongolia, can be up and running as soon as possible," Mr Bond said.
Chairman of Golden Concord Group Limited, Mr Gongshan Zhu, said, "We recognise that Linc Energy is the world leader in UCG with proven technology and technical capability to beneficiate coal resources via its UCG process and produce value added clean diesel and aviation fuels via GTL processing. The timing for this partnership is perfect as it provides an opportunity for the joint venture to make a valuable contribution to meeting China's increasing energy demands. We are working closely with Linc Energy to close this transaction and look forward to a long and prosperous partnership."
Contact
Linc Energy Limited
T: +61-7-3229-0800
F: +61-7-3229-6800
WWW: www.lincenergy.com.au
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