At the end of April I visited the Bloodwood Creek site of CNX and received a briefing on their progress. Panel #2 is producing gas which is being flared. This flare is burning with a bright blue flame, indicating good quality gas. CNX is awaiting the go-ahead to commence power generation from DERM. Panel #2, which is 600 metres long, has an estimated life of 5 years and the entire site has enough coal to last 45 years.
A couple of the engines have been run on syngas and work continues here on fine tuning them to optimise for this fuel. The power poles have been erected and awaiting the wires being strung.
The 5MW power station is there to prove the system. Once this has been done, plans are being drawn up to install a 25MW steam turbine power station. The major shareholder, Incetec Pivot wish to build a fertiliser plant on the site as they need hydrogen for fertiliser production.
The technology that is owned by CNX was developed by the CSIRO over a period of about 15 years. It is the best UCG technology in the world. They have spent a lot of time perfecting this, after analysing 50 years worth of data from the former Soviet Union and the USA.
Around the time of the oil shock in the 1970s, I visited a CSIRO lab in Sydney where they were attempting to find a method of producing petrol from coal, so they have a long experience in this area.
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CNX Price at posting:
30.0¢ Sentiment: Buy Disclosure: Held
