australian-shares.com
  #1  
Old 12-07-2009, 03:27 AM
Sparty Sparty is offline
Administrator
 
Join Date: Mar 2009
Posts: 1,131
Default Carbon Energy CNX to work in Chile with Antofagasta

Carbon Energy signs first international development Agreement with Chile’s Antofagasta Minerals
• Carbon Energy (CNX) has executed an Agreement with Antofagasta Minerals S.A (“Antofagasta”) to jointly assess and develop a coal deposit in Mulpun, Chile using Carbon Energy’s Underground Coal Gasification (UCG) technology.
• Carbon Energy will earn a 30% interest in the Mulpun coal deposit by applying its world leading UCG technology.
• Carbon Energy was selected by Antofagasta as their preferred joint venture partner on the strength of its superior technology, following the completion of a two year process by Antofagasta in which the capability of UCG companies from all over the world was rigorously assessed.
• Chile provides an ideal market opportunity for Carbon Energy due to the fact that energy demand is forecast to grow at 6-7 per cent over the next 5-10 years and there is an under supply of domestically sourced energy. Chile is highly exposed to increases in the already high price of imported supplies of diesel, natural gas, LNG and coal.
Agreement to establish a Joint Venture
Carbon Energy has signed its first international agreement with Antofagasta Minerals to develop a trial project in Mulpun Chile, utilising its UCG technology.

Following feasibility studies, it is anticipated that both parties will enter into a Joint Venture to develop commercial projects based on UCG syngas.

Carbon Energy’s Managing Director, Mr Andrew Dash, commented “This is a very significant day for Carbon Energy and we are especially pleased to be entering into our first international relationship with a company the size, strength and capability of Antofagasta Minerals, one of the world’s biggest mining and exploration companies”.


“The Agreement is consistent with our strategy to build a portfolio of coal resources throughout the world by leveraging off our core capability in UCG technology.”

“In addition, Antofagasta shares Carbon Energy’s ambition to provide low cost and reliable cleaner energy in an environmentally responsible and sustainable manner.”

The Mulpun Coal Deposit
The Mulpun site is located in southern central Chile, 840 km south of Santiago and 40 km east of Valdivia, a city with a population of 150,000. Initial drilling and hydrological results provided by Antofagasta have indicated that it is suitable for UCG. As the deposit remains open to the North West, there is scope to find additional coal in this location, as well as within the other similar geological formations in the area.

Dr Cliff Mallett, Carbon Energy’s Technical Director said, “A lot of the preliminary exploration work had been already undertaken by Antofagasta’s energy team and the results to date are really positive. Additionally, their approach to the technical and environmental development of the site has been very comprehensive. We at Carbon Energy have been impressed with the commitment and the capability of the Antofagasta team and we look forward to getting the next stage of the project underway”.

Once feasibility studies have been completed and a development plan approved by both parties, a Joint Venture will be established to begin work on the design, construction and operation of the trial project. Carbon Energy will fund 30% of the total costs of phase 2, estimated at $4.5 million to be funded from existing sources. A successful trial will lead to the development of commercial projects based on UCG syngas.

Mr Dash noted that “Chile is an ideal market opportunity for Carbon Energy - energy demand is forecast to grow at 6-7 per cent over the next 5-10 years and there is a reliance on high priced imported diesel, natural gas, LNG and coal.

“As Carbon Energy is cost competitive in our home market in Queensland, where there are abundant supplies of coal and gas, we are confident that the joint venture will have no difficulty competing in Chile against imported energy sources. By way of example a 200 MW power station in QLD would generate approximately $70 million p.a. In Chile, the same sized plant could generate between $140 million to $210 million p.a.”


Project Structure for Joint Venture’s Commercialisation of UCG
Under the Agreement both Carbon Energy and Antofagasta will commence work immediately to finalise a work plan, schedule and budget for an initial trial at the Mulpun location. This represents phase one of the project, which has been structured in four phases, with Carbon Energy’s contribution being management time and travel costs. Antofagasta will conduct drilling and hydrological testing at its cost during this phase.

Once feasibility studies have been completed and the development plan approved by both parties, Carbon Energy will earn its 30% interest in the coal deposit and the Joint Venture will be established. The JV will then proceed to phase two which is focused on the design, construction and operation of the trial project. Carbon Energy will be required to fund 30% of the cost of this phase.

It is anticipated that the parties will commit to the trial project in the first quarter of 2010, subject to timing of government and other development approvals.

A successful trial will form the basis for large scale commercial projects in the area. Phases three and four are focused on the commercialization stage including the undertaking of feasibility studies into a number of options followed by a development decision anticipated in calendar year 2011. An initial market study has already identified power generation opportunities. Both parties would be required to fund their pro rata share of any costs involved. Carbon Energy will also earns fees from the joint venture for the application of its UCG technology.

Andrew Dash
Managing Director
Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On

Forum Jump


All times are GMT. The time now is 06:07 PM.


Powered by vBulletin® Version 3.8.1
Copyright ©2000 - 2018, Jelsoft Enterprises Ltd.