its a waiting game ...

The big three Aussie UCG'ers are at the crossroads I feel ... thats LNC, CNX and CXY.

Why?

Well, I feel a lot has been promised collectively and to date not a lot of solid grunty progress has been achieved ... unless of course you rate blue sky highly.

After much fanfare and chest beating, LNC have spent at least 14 months in hibernation pending surplus coal asset sales. Why their core business of GTL from UCG syngas could not be demonstrably advanced during the sale period is a worry as far as I am concerned. Conspicuous in its absence is any real news on syngas production technology. Then there is the strange non core diversion into electricity generation in Vietnam and ventures in the US. It's pretty hard to "scale back" from multiple announcements of "world class" this and that. So, it feels even if the sale process is ultimately successful, focus, a kick start and some transparency will be needed to get things moving imo.

CNX has had a slower and more steady progress, possibly due to the quality of the parents (CSIRO and Incitec Pivot). Like LNC, CNX appears to have had an apparent change of focus ... in this case from fertiliser production to electricity generation ... and a cautious change at that with timelines being 5MW by this Xmas and 20MW late 2010 to early 2011. To date there has been the solid, mostly successful Bloodwood Creek trial burn and no news of future syngas burns or production burns. Solid if not world beating or exciting is a good descriptor I feel.

Then there is CXY who definitley can't be accused of over-promising lol. Imo, they are stand alone to date for two reasons, 1)their resolute focus to commercialise UCG via the simplest route of electricity generation and 2) their use of the proven UCG technology already developed by Ergo Exergy rather than trying to develop inhouse UCG technology like LNC and CNX. Those two points represent a significant derisking compared to LNC and CNX imo. I feel simple is good when it comes to commercialising a new technology like UCG.

The crossroads is simply about delivering on stated strategies and technologies. For mine, CXY has suffered investment slings and arrows for perceived plodding whilst others have jumped from the starting blocks due (percieved?) early progress. Ultimately, commercial success will be hard to ignore and imo CXY could be considered to be poised for commercial success.

Its a waiting game for sure.

Cheers
Dex