Wildhorse says Hungary agreement will establish coal gas as...

Wildhorse says Hungary agreement will establish coal gas as alternative to shale in Europe

Wildhorse Energy (LON:WHE, ASX:WHE) has signed a landmark agreement to devise the blueprint for the development of coal gas as a power source in Hungary.

The company will co-operate with the Hungarian government in drawing up the legislative and regulatory framework to develop the country’s underground coal (UCG) resources into a new source of electricity.

Matt Swinney, Wildhorse’s managing director, said the framework could also become the blueprint for developing UCG in neighbouring central and east European countries.

He added that UCG now has the opportunity to establish itself as an alternative to fracking as a source of power for Europe.

"As recent bans on fracking continue to obstruct the future of shale technology in Europe, the potential for UCG to establish itself as an important technology in the region is increasingly being recognised due to its ability to capture the energy content from billions of tons of stranded coal assets in a 'frack-free' way.”

“Importantly, compared to shale, European coal is also geologically well understood,” he added.

UCG is a relatively new process that turns unwanted and uneconomic – “stranded”- coal fields into highly valuable gas assets.

It utilises recognised gasification technology below the surface to produce syngas, which is ideal as a feedstock to gas-fired power stations.

Wildhorse’s key project UCG project is at Mecsek Hills in Hungary and Swinney said the agreement today was another step towards de-risking the project.

Mecsek Hills has a JORC Inferred resource of 184.5Mt within its target area, while a recent pre-feasibiity study indicated the economic and technical potential of supplying syngas as a gas feedstock for power stations.

A Bankable Feasibility Study is underway and Wildhorse is holding initial discussions with potential strategic partners to fund its completion and the construction of the project.