“Would that stack up better for you?” Yes. There is an economy...

“Would that stack up better for you?”

Yes. There is an economy of scale associated with building power stations. The larger the power station the cheaper it is to generate each MW. Generally above 500MW it is between $1-1.5 million per MW. The smaller the power station the higher the costs per MW, perhaps double that.

“The energy resource to support the larger project is equiv to about 830PJ per my prev calcs. Thats a significantly bigger resource than most "hot" coal bed methane plays currently on the ASX that are valued a lot higher and similar to QGC's much touted 1000PJ target for 2P reserves which is the main basis for their $2 bill mkt cap.”

Is CXY’s reserves 2P or just an estimate? QGC has an estimated 17,000PJ of gas in place. The big difference between QGC and CXY is, QGC had $292 million in cash as at 31 Mar 07 and have money coming in from gas sales. CXY now has $2 million in cash and it could be 3 to 4 years before they are generating power at Kingaroy.

“I am not so sure about your understanding of relatively higher capex of ucg compared to conventional gas.”

You have to drill a lot more holes for a UCG project. 2 holes for each cell that you are going to gasify. An oxidation well and a production well and there will be pipes coming and going to each one.

The water will contain phenols, you need to remove them, if CXY uses air as an oxidiser then there will also be Nitrous oxides you need to deal with, there are costs associated with this. The alternative is to use an oxygen generator. Once again, this costs money. There will also be compressors, pumps etc.

“Origin have just announced a 633 MW gas fired power stn fuelled by their own CBM”

Braemar cost $780 million for a 630MW gas-fired power station. The gas will be sourced from Origin’s extensive coal seam gas reserves at Spring Gully and the Walloons. The development of these fields, associated pipeline infrastructure and other project costs will be about $500 million. CBM and UCG share some synergies so these costs may be similar.

“I think you will find that Cougar intend to get their cash flow only from supplying the syngas to a partner power station project within their ucg operation”

Where is the closest gas-fired power station? Tarong is close but it is coal fired.