lrts recap on business models shall we ..., page-5

Poyn >>> “there is no need for expensive oxygen injection or nitrogen rejection equipment with this application.”

Ptol >>> "Are you sure about that? The Nitrogen rejection/Oxygen generation equipment is required so that NOX are not produced during the UCG process. NOX are very bad Green House Gases, about 240 times worse than CO2."

Poyn >>> Am I sure? ... not quite, so lets say there is a REDUCED need for oxygen injection or nitrogen rejection euipment with the syngas/electricity application. Certainly, the cheaper option of air injection as distinct from the expensive option of oxygen injection is possible ... as you would be aware, site produced oxygen requires energy input which doesnt do the green credentials any help.

Filling in the dots, it seems LNC now requires nitrogen rejection equipment to get their syngas in spec for the CTL process, just to get to the starting line for the 6 bpd trial plant. Wouldn't the need for nitrogen rejection equipment have been evident from the results of the LW/Ergo trial burn at Chinchilla (1999-2002) OR has something unexpected happened with the current (as yet unreported) LNC trial bur
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Poyn >>> “Why would Cougar seek to deliver a small, inexpensive initial ucg project than struggle with syngas quality issues and resultant huge capex reuirements to go straight to Coal to Liquids, like others in the sector?”

Ptol >>> "I guess that comes down to risk verses reward. If you can produce 20,000bpd of synthetic diesel for between US$23 - US$25 which you could sell for about $125 per barrel but it would cost you $650 million to build the plant would you do that or build a 40MW power station for $55 million to sell electricity at $75 per MW/h? Who knows what energy prices will do in the future?

Poyn >>> Cougar are undoubtedly aware of the full range of potential opportunities for ucg ... industrial gas, electricity, diesel, fertilisers etc and likely more not yet in the public domain .... yet they choose to undertake something deliverable and then leverage from that early success. Refer to the ASX announcement dated 16/8 ... CTL or other ucg applications have never been ruled out that I am aware of.

LNC on the other hand have boldly stated they are going for a world first rollout of CTL using ucg syngas rather than a convetional coal surface gasification process, a project with a higher technical, finance and execution risk than Cougar's initial project you would agree.

I am comfortable with a Cougar's risk profile and my "high conviction" holdings. I havent the stomach for what I perceive to be LNC's greater total risk profile.
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Poyn >>> “Why are the more ambitious in the sector dropping further and further behind their stated timelines and having raising licks of dilutive capital and lose more time to install equipment to improve syngas quality just to get suitable syngas feed?”

Ptol >>> "That is an interesting question. Has CXY stated any timelines for Kingaroy apart from the drilling was to commence on 31 Oct 07 and the trial burn is to commence in Apr 08? Have they said when the trial burn was to be completed or do they not want to say? Have they addressed how they will raise the capital to fund the establishment of the UCG field for the trial (about $20mill) ..."

Poyn >>> You didnt answer my initial question, but offered three different questions as your reply? I remain keen to read your reply.

In the meantime, it is likely that rig scheduling has delayed drilling commencement at Kingaroy ... what resource or coal company doesnt suffer such industry related constraints from time to time? My call is that any delay will be short term.

A timeline for the Kingaroy trial burn is a Mar/Apr 2008 commencement, as published. I suspect the indicative finances in the ASX announcement of 16/8 have a reasonable basis in fact. I have read indicative timing somewhere, and will look for it later tonight.
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A suggestion ... quit it with the quoting and just answer the questions ... its too long winded and exhausting this way lol .... readers can always refer back to a previous post to cross check if they feel the urge.


I'm outta here.
Cheers
Poyndexter