UCG In China  

While UCG may lose out to CSM in Queensland's coal fields, the unhealthy Chinese interest in coal to liquids (and plastics) continues unabated, with their latest move being an interest in taking Linc Energy's UCG technology to the Chinese coal fields - Linc inks UCG deal in China.

Linc Energy Ltd has signed a deal with Xinwen Mining Group to develop underground coal gasification (UCG) and gas to liquids (GTL) projects in China. The Queensland-based group has signed a letter of intent with Xinwen, the same company which agreed to acquire a package of Linc's Australian coal exploration permits for $1.5 billion.

The two companies have agreed to form a joint company to develop UCG fields to produce gas for transport to Shanghai through the west to east pipeline project, which is under construction. The joint company will also provide feedstock for a GTL facility to produce liquids that will be transported by pipeline to the Dushanzi oil refinery.

"This is an exciting development as Xinwen already has government approval for underground coal gasification," Linc chief executive Peter Bond said in a statement.

UCG is the process of extracting coal from the ground through its transformation into a combustible gas for power generation, or as a feedstock in the production of diesel or fertilisers.

Xinwen owns the Yinan and Yibei coal fields in the Yining mining area of China, which cover over 479 square kilometres and have a reported 15.37 billion tonnes of coal.