(MENAFN- ProactiveInvestors)
( OTCQX:CNXAY) is a step closer to becoming a commercial gas producer after the Queensland Government’s independent review process for the Blue Gum Gas project is completed.
The Blue Gum Gas Project would be the first commercial UCG project in Australia and unlock the fifth largest Proved and Probable (2P) Reserve of 1128 petajoules (PJ) in Queensland.
Of note international business initiatives are also continuing to pursue licensing opportunities for 's keyseam technology.
The Department of Environment and Heritage Protection's appointed external consultant has finished its review of the Company’s Decommissioning Report and Rehabilitation Plan for Blue Gum project in the Surat Basin.
A decision by the Government is now subject to consideration of the final reports from DEHP and the Department of Natural Resources and Mines (DNRM) (lead agency for this process) which are expected to be submitted in the New Year.
CEO and managing director Morné Engelbrecht said “As soon as the Government has fully considered the Departmental recommendations we are poised to move ahead with commercialising the Blue Gum Gas Project.”
"The demonstrated and scientifically assessed Bloodwood Creek trial results provide strong confidence in the Company’s technology through its complete lifecycle from initiation to rehabilitation which now underpin the marketing of the technology.
"While the Queensland Government considers the Departmental recommendations the Company will increase its attention on securing further licensing opportunities globally armed with the data supporting the outcomes from the Bloodwood Creek trial.
Engelbrecht concluded: “As we await a final decision from Government we will be directing our resources toward both securing off-take and development partners for our Blue Gum Gas Project and advancing our international business development program.
"The environmental results that we have achieved from the Bloodwood Creek trial provide us with a powerful demonstration of the advanced and leading nature of our gas production technique."
Australian gas market
It has been well reported that the availability of domestic gas will become a major issue for East Coast Australia during the next five to 10 years.
Increasing LNG exports from the three LNG projects in Gladstone will take away gas currently used by Australian
manufacturers and consumers. Efficient low cost gas production will become an investment priority to ensure no disruption to local manufacturers.
The Blue Gum Gas Project will have potential to contribute 25PJ per annum of pipeline quality natural gas by 2017.
This is subject to Queensland Government approval and a suitable financing partner is found.
Stakes high
An independent expert valuation of our Surat Basin gas assets concluded that the assets have a preferred value of $205 million on a fully risked basis at this time.
Once project approvals are received it could be expected to rise relative to current market capitalisation of .
This should increase further as it progresses off-take negotiations with potential foundation customers for the project and investment is made by local industry.
The keyseam technology is known to be one of the most environmentally sound and cost effective methods of turning coal to gas.
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