Carbon Energy, Shanxi Coal Reiterate Commitment to Shanxi UGC Project

Carbon Energy has reaffirmed its agreement on underground coal gasification technology franchise with Shanxi Coal that would net Carbon $10 million in fee, Proactive Investors has reported.

Carbon Energy and Shanxi Coal had earlier last month entered into a definitive agreement under which Carbon was to provide its underground coal gasification technology to develop UCG projects in Shanxi province.

Under the agreement, Shanxi was to make an upfront payment of $7.5 million; pay commercial schedule of rates for technical and engineering services; and an ongoing royalty stream upon commercial sale of syngas. However, the initial payment has been delayed potentially due to the recent transition to a new leadership in China.

Carbon Energy has a proprietary keyseam technology that provides high quality product gas to produce power, fertilisers and pipeline quality gas. It can extract up to 20 times more energy from the same resource than coal seam gas.