coal gassification

Sydney, Australia, Feb 3, 2009 - (ABN Newswire) - Carbon Energy Limited (ASX:CNX) announced today that it has completed the 100 day Underground Coal Gasification (UCG) trial at its Bloodwood Creek site, near Dalby in South East Queensland. Carbon Energy has clearly demonstrated that its UCG module can deliver commercial scale syngas production of 1 peta joule (PJ) per annum of syngas, with the following key outcomes:

- Demonstration of sustained production of air injected syngas suitable for low cost generation of power (achieved in November 2008);

- Demonstration of production of high value oxygen injected syngas suitable for the production of low emission electricity, chemicals and liquid fuels;

- The conversion of unmineable coal in-situ to gas energy at an average rate of 20PJ per million tonnes in the Surat basin;

- Validation of Carbon Energy's proprietary design and economic models which can be applied to any suitable coal seam anywhere in the world; and

- Consistently achieving, and exceeding, target energy content and flow rates.

Carbon Energy's Managing Director Andrew Dash said the Company will be completing its analysis of the data obtained during the trial phase prior to providing the results to its two main commercial partners; Incitec Pivot and LyondellBasell, for their assessment.

It is anticipated that once approved, further pre-feasibility studies will then be undertaken to confirm syngas's suitability for power generation, ammonia manufacture and methanol production. In the meantime, the UCG syngas reactor at Bloodwood Creek will continue to operate on air injection, with ongoing monitoring and verification of results, while plans for commercialization are initiated.

About: Carbon Energy Limited

Carbon Energy's purpose is to produce clean energy and chemicals feedstock from Underground Coal Gasification (UCG) syngas.

Carbon Energy's unique approach to UCG and syngas production produces a low cost option for capturing CO2 making it a leader in clean coal technology.

Carbon Energy's ambition is for syngas to become the preferred feedstock for producing clean coal power stations, an alternative to oil-based fuel, agribusiness products (fertilisers and explosives), polyolefin products (such as plastics) and allowing for economic carbon capture.

Carbon Energy's technological advantage comes from its association with CSIRO including world class geotechnical, hydrological and gasification modelling capabilities.

Located at the hub of the Surat Basin's energy infrastructure, Carbon Energy's energy resources are perfectly positioned to provide the basis for future energy, industrial and agricultural chemicals, and liquid fuels for export and to the growing local industrial hub.