ucg and gtl scoping study, page-10

Sav-J and others

I have been following ucg development in Australia for about three years now.

The common theme for the current players CNX, CXY and LNC is that they have in-house or subcontracted ucg technical capacity ... without that, you just have coal in the ground and wishful thinking.

UCG technologists and technologies are thin on the ground and here and overseas because commercialised UCG is a nascent industry, despite the fact that it has been practised for 100 yrs or more in a relativley small way in the former Soviet Union and Germany that I know of.

Not all coals are suited to UCG and not all basin geologies and hydrogeologies are compatible with UCG ... part of the UCG IP is recognising coals other factors that are suited to UCG.

Unlike conventional hydrocarbon gas and now coal seam gas that can be piped 1000's of km around and across the country, UCG syngas will almost always need to be developed for a specicific project (or series of projects) located at the source of a UCG production faciltiy. The main reason for this is that UCG syngas is a low calorific value hydrogen rich gas whereas conventional and coal seam gas are higher calorific value methane rich gases ... you cant mix syngas with the other gases via shared pipelines.

Notwithstanding the above, the economics of UCG can be compelling and syngas can fuel power stations and can be converted to liquids like diesel and products like ammonia based fertilisers.

Coal seam gas extracts only about 5% of the calorific value of a gassy coal seam as the interstitial gas formed/stored in pores/voids within the coal ... the coal itself if left largely intact, but to access the gas you have to drain the seam by pumping huge quantites of often saline groundwater to the surface that requres storage, treatment and disposal.

UCG on the other hand extracts up to 80% of the calorific value of a suitable coal seam as a hydrogen rich syngas by effectively combusting the coal seam insitu ... UCG combustion operates as a "bubble" formed within a groundwater inundated coal seam ... when the burn is completed the bubble is collapsed and the seam (now largely a void patially filled with collapsed roof rock) is again inundated. That whole process has to be finely controlled to ensure operating pressures are less than groundwater hydrostatic pressures so that the chemical pollutants do not escape to the groundwater regime ... the UCG burn therefore cant be located within a region and depth range that may be a current or future groundwater source.

The typically 16x energy density of UCG production compared to say coal seam gas (80% divided by 5%) means that equivalent energy value is extracted from say a 10km2 UCG field is the same as that extracted from a 160km2 coal seam gas field ... and remember, the coal seam gas field need to be drained whereas the UCG field doesn't.

This energy density is part of the reason why it is feasible to develop a UCG field for a single project such as a power station or a plant producing diesel or fertiliser ... I can't recall the exact numbers right now, but a 400MW power station can be supplied with Syngas for something like 30 years from a UCG field of just 5-10km2, depending on seam thickness.

That energy density I mentioned above probably works against CTP being "acquired" at some stage because the current advanced UCG players already have more coal than they can feasibly develop within a sensible time frame.

All food for thought and offered so some of you dont get too carried away with the blue sky potential. Either CTP has to acquire UCG technology or develop it and the timeline for commercialising UCG would have to be closer to 10 years than 5 imo.

Cheers
Dex