Carbon Energy Ltd edges closer to commercialising UCG technology
Date
6/19/2016 7:49:36 AM
(MENAFN- ProactiveInvestors - Australia)
Carbon Energy Ltd (ASX:CNX) is a step closer to commercialising its underground coal gasification technology after achieving formal registration of its Chinese joint venture company.
Carbon Energy''s JV partner in China is Beijing JinHong Investment Co. Ltd and the JV aims to develop a vertically integrated gas company in China.
Registration triggers the signing of licensing and service agreements with JinHong which will see them contribute $US30 million towards a commercial demonstration project using Carbon Energy''s keyseamTM technology.
Carbon Energy is to earn a profit share from its 30% interest in the JV.
As China is estimated to consume half of world''s coal, it is a compelling jurisdiction for the company''s UCG technology.
UCG research centre
Recently, Carbon Energy was involved in the formation of the UCG research centre in China.
The centre was formed in conjunction with one of the world’s largest mining universities, the China University of Mining and Technology (CUMT).
Carbon Energy has two representatives on the governing body of the CUMT International Research Centre for Underground Coal Gasification.
The centre was officially opened on 24 April 2016 in Xuzhou, Jiangsu Province.
Funding will be provided by Chinese private industry participants and the CUMT, with future government funding anticipated.
Analysis
The registration of the JV represents a significant milestone in Carbon Energy''s ambitions to commercialise its keyseamTM technology in China.
By validating the technology in a commercial demonstration project, Carbon Energy will look to create a vertically integrated gas business within China, resulting in the development of a portfolio of projects.
The size of the coal and energy market in China together with the strong demand for lower emission coal technologies makes this a compelling opportunity for Carbon Energy.
The company is at the forefront of the UCG industry within China highlighted by its participation in the formation of the UCG research centre. This positions Carbon Energy well to interact with potential collaborators and play a role in policy formulation.
The share price has rallied 75% today, currently trading at $0.016 per share. <
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