cgv aims high with with mongolian agreement

http://www.proactiveinvestors.com.au/companies/news/3094/clean-global-energy-aims-high-with-with-mongolian-coal-gasification-agreement-3094.html

Monday, November 02, 2009

Clean Global Energy aims high with with Mongolian coal gasification agreement

Clean Global Energy Limited (ASX: CGV) has entered into Joint Venture Agreement to undertake a proposed US$400m Underground Coal Gasification project in Inner Mongolia, China.

The stock spiked on the news, currently up 15.4%, to 22.5 cents. Trading in the shares was strong with volume of 7.5 million shares.

The project is to be undertaken on a staged basis on Inner Mongolia Gu Xin Mining Co Ltd, Beijing’s 1.8 billion tonne coal deposit in Inner Mongolia.

A Hong Kong Based Joint Venture Company is to be established for the project and to undertake the capital raising activities for the project on the Hong Kong Stock Exchange of not less than US$120m and debt funding of not morethan US$280m.

Initial funding of the JVC prior to the listing, of US$1m will be contributed by the joint venture partners in proportion to each parties shareholding.

CGE’s estimated portion of this will be US$350,000 which will be funded from existing cash reserves.

CGE would hold a 35% controlling interest in the JVC and 2 board seats with the other parties holding 1 board seat each.

The Joint Venture Company is to enter into a documented off-take agreement with Inner Mongolia Sukli Oil and Gas Development Co. Ltd for the supply of between 5-12million cubic meters of Syngas per day.

The Joint Venture Company is to exclusively engage and appoint Clean Global Energy Limited to design, operate and manage the Underground Coal Gasification plant under a separate commercial operating agreement

Clean Global Energy secured the Joint Venture Agreement with Bejing Yusenjiayu Environmental Protection Technology Co Ltd of Beijing, China , Inner Mongolia Gu Xin Mining Co Ltd of Beijing, China (GX) and Goldbridge Clean Tech Energy of East Sussex, Unitied Kingdom, to undertake a commercial underground coal gasification project on GX’s Inner Mongolia coal deposit.

GX is an established and professional mining company, with a large scale coal resource of 5 billion tonnes in Inner Mongolia. With more than 1.2 billion tonnes of coal at depths and seam thicknesses amenable to UCG.

The Joint Venture Agreement follows on from a successful review of GX’s coal data and subsequent detailed discussions and negotiations over the last week following a Memorandum of Understanding between the parties on 17 August 2009.

Following the signing of the Joint Venture Agreement in Beijing, John Harkins, CGE’s chairman and CEO, said: “This is a great outcome for CGE and its shareholders. Not only is the Joint Venture Agreement the achievement of another key milestone for CGE, it is a significant example of the recognition of CGE’s UCG capabilities by the international business community.”

“China is actively seeking clean energy alternatives and now was the right time for CGE to become involved in this space,” he said.

“We are very pleased to be working together with our joint venture partners to provide a cleaner coal solution for China and the global community and look forward to a successful future.”

CGE is positioning itself to become a significant global alternate energy company through utilizing Underground Coal Gasification to release untapped energy from coal that is typically uneconomical to mine through conventional processes.

UCG produces a low cost, high quality Syngas that can be used to produce power, ultra clean diesel, other fuels and chemicals.

UCG has been used in commercial operations for over 50 years.

CGE’s UCG technology uses an advance process known as Controlled Retractable Injection Points that provides greater control and efficiency in the UCG process.

CGE is not without experience in the UCG sector, one of its directors Dr Michael Green is currently implementing the CRIP UCG process in commercial projects in the UK and Europe.

The CRIP UCG process was successfully trialled in a €17m European project in Spain which was headed up by CGE’s Technical Director, Dr. Michael Green.