Carbon Energy Starts China UCG Project

Carbon Energy has commenced work its first commercial underground coal gasification (UCG) project in Inner Mongolia, China.

Carbon and project partners Zhengzhou Group have agreed on the scope of works comprising a total of eight engineering packages, for the design and commissioning of the first UCG panel (Process Characterisation Panel (PCP)).

The company expects to earn a total of $5.25 million from the engineering works to be performed to design and commission the first UCG panel (PCP) together with a Technology Fee milestone payment of $3 million on successful commissioning.

Commissioning of the PCP is estimated to occur by mid-2014, the company said.

Further Engineering Services Fees and $7 million in Technology Fees are payable during and on achievement of certain milestones over subsequent phases in implementing the commercial scale project and subject to the successful commissioning of the PCP.