LON:CHL^I21 | Coal 2.0 - CBM/CSG, UCG, CTL Etc.

28th Jun '10 by Mattybuoy

113 comments 53057 reads

Coal 2.0 - The use of coal in ways other than just digging the stuff up and burning it. "Fungible hydrocarbons".

Background Information

CBM/CSG - Coal Bed Methane/Coal Seam Gas - http://en.wikipedia.org/wiki/Coalbed_methane
UCG/ISCG - Underground (or In-Situ) Coal Gasification - http://en.wikipedia.org/wiki/Underground_coal_gasification
CTL - Coal To Liquids - http://en.wikipedia.org/wiki/Coal_liquefaction
GTL - Gas To Liquids - http://en.wikipedia.org/wiki/Gas_to_liquids
Syngas - Synthesis Gas - http://en.wikipedia.org/wiki/Syngas
Fischer-Tropsch - Conversion of Syngas to liquid fuels - http://en.wikipedia.org/wiki/Fischer-tropsch
Ammonia - NH3, a liquid chemical made from Syngas - http://en.wikipedia.org/Ammonia
Methanol - CH3OH (or MeOH), a liquid chemical made from Syngas - http://en.wikipedia.org/Methanol
SNG - Synthetic Natural Gas - http://en.wikipedia.org/wiki/Synthetic_natural_gas
CNG - Compressed Natural Gas - http://en.wikipedia.org/wiki/Compressed_natural_gas
LNG - Liquefied Natural Gas - http://en.wikipedia.org/wiki/LNG
CCS - Carbon Capture & Storage - http://en.wikipedia.org/wiki/Carbon_capture_and_storage

Listed Companies

The list is in no way comprehensive and is presented in simple alphabetical order.

AFC Energy (LSE:AFC) - http://www.afcenergy.com - Hydrogen fuel cell developer. JV with Linc Energy to use hydrogen stream within UCG syngas to produce electricity.
Alkane Energy (LSE:ALK) - http://www.alkane.co.uk - CMM (Coal Mine Methane) extraction in the UK, one of a number of "gas-to-power" activities.
AlterNRG (TSX:NRG) - http://www.alternrg.ca - Plasma Gasification technology, based in Canada.
Altona Resources (LSE:ANR) - http://www.altonaenergy.com - Conventional CTL project in Australia.
Antofagasta (LSE:ANTO) - http://www.antofagasta.co.uk - UCG project in Chile in conjunction with Carbon Energy. Also (mostly) copper mining.
BG Group (LSE:BG.) - http://www.bg-group.com - Major investor in CSG projects in Australia for purposes of LNG export. Also substantial conventional O&G activities.
Blackham Resources (ASX:BLK) - http://www.blackhamresources.com.au - Conventional CTL project in Australia. Also iron ore possibilities.
CanAm Coal (TSX:COE) - http://www.radar.ab.ca - Above-ground CTL projects in the US. Also conventional coal mining.
Carbon Energy (ASX:CNX) - http://www.carbonenergy.com.au - UCG projects in Australia and Chile.
CBM Asia (TSX:TCF) - http://www.cbmasia.ca - CBM developer in Indonesia.
Central Petroleum (ASX:CTP) - http://www.centralpetroleum.com.au - CSG and UCG prospects in Australia. Also conventional O&G prospects.
Churchill Mining (LSE:CHL) - http://www.churchillmining.com - CBM prospect in Indonesia. Also (mostly) conventional coal mining projects.
Clean Global Energy (ASX:CGV) - http://www.cleanglobalenergy.com.au - UCG projects in Australia and China.
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Mattybuoy

12th Aug '10

Wildhorse Energy has entered into a "strategic alliance" with Dalkia (a subsidiary of EDF).

http://www.stocknessmonster.com/news-item?S=WHE&E=ASX&N=501302

Basically, it involves a syngas off-take agreement and a placement.

It's very important to get the power companies on board with UCG, since they are in most places the biggest potential consumers of syngas. So good stuff IMO.

marben100

18th Aug '10

It seems that Europa Oil & Gas (LON:EOG) is proposing to get into the UCG business in the UK: http://www.investegate.co.uk/Article.aspx?id=20100818070000P77A1

With a market cap of £9m and around £1m of cash, how they propose to finance any serious work on this is a mystery to me.

Cheers,

Mark

Well spotted!

I'd hazard a guess that they'll get someone to farm-in, like Linc, with their big wad of cash. You might notice that they are mentioned in the "Useful Links" at the bottom of the RNS.

Linc basically want to own all the coal they can get their hands on, so I can definitely see them getting involved in the UK and the rest of Europe.

The North Sea may have considerable potential for UCG. I saw somewhere that Norway estimated there to be around 3 trillion tonnes of coal in their bit, and you have something of a ready made gas handling infrastructure to hand.

[ EDIT - Just noticed new analyst coverage for LNC ]

http://www.vision6.com.au/download/files/21473/1231411/LNC_Initiating_Report_160810.pdf

19th Aug '10

I just had a very quick look at Europa. Seems like an interesting bunch of assets languishing a bit due to lack of funding.

If I was Peter Bond I think I'd make an offer for the whole shebang. Around $20m ought to do it. Quite a nice European entry for Linc methinks. You can bet your arse half of those Eastern European licenses have some deep coal in them, apart from anything else.

Hi Mattybuoy,

"Around $20m ought to do it. "

Doubt it. The principals own around 50% of the shares. ;0) They might settle for $30m, though - still peanuts if Bond thinks their stuff has value.

Not sure whether the East European licences would allow access to coal seams, or whether they're restricted to conventional oil&gas. Nevertheless, I have a v small punt in this stock, as it appears that the conventional EE stuff might be quite a nice asset, being co-developed with Aurelian Oil & Gas Plc (LON:AUL) (as well as there being upside potential to their uK producing stuff).

Thanks for pointing out the farm-in potential of the new licences. A nice "free option", alongside the other assets.

Cheers,

Mark

OK $30m then ;-) I was being silly really, a farm-in is far more likely.

Or ... Is there perhaps some value to be had for Linc in getting involved with gas fraccing, as per Romania/Poland etc? It's all underground and "clever" stuff.

Murakami

29th Aug '10

Just cross-linking to the latest Continental Coal writeup here: http://www.stockopedia.com/content/emerging-south-africa-coal-play-continental-coal-limited-looks-to-join-aim-46913/

31st Aug '10

Err I think that's Coal 1.0 - conventional mining ...

Correct me if I'm wrong. It has been known, often :-)

Linc have declared a special dividend of 10c per share following the $500m coal sale.

http://www.stocknessmonster.com/news-item?E=ASX&S=LNC&N=223453

The cost will be about $50m, leaving plenty in the kitty for whatever comes next.

2nd Sep '10

It looks like AFC (B9 Coal) and Linc have plans for the North East, the cradle of the UK's former coal greatness.

SOUTH east Northumberland could become the base for a pioneering bid to produce almost emission-free electricity from coal without having to mine it first.

http://www.newspostleader.co.uk/latest/Plant-in-the-frame-as.6508506.jp

14th Sep '10

This is significant.

New Hope Corporation (ASX:NHC - a producing Aussie thermal coal miner) has finally revealed the details of its CTL plans, which it has been mentioning in a vague manner for some time.

New Hope Corporation Limited to Commercialise New Coal to Liquids Technology with Superior Environmental Performance

http://www.stocknessmonster.com/news-item?S=NHC&E=ASX&N=223890

Basically, they are going to commercialise a technology from "Quantex Research Corporation (QRC), a private Canadian company which has acquired the technology rights with a license from the West Virginia University in the USA". This technology is a direct liquefaction process which produces "pitch" (or I dare say you could call it bitumen) which can then be upgraded into synthetic crude oil much like they do in the Canadian oil sands. Importantly, the process produces much less CO2 than conventional coal gasification as used to feed Fischer-Tropsch reactors, and even better there is a marketable by-product which they describe as "synthetic metallurgical coke" .

New Hope is a serious conservative "establishment" company, who have access to billions in cash and funding. I do not think they would undertake a project like this without estimating a very high probability of success. As I say, significant ...

StrollingMolby

16th Sep '10

SASOL may cancel $10bn Coal Liquefaction Project in Indonesia

...as there is no guarantee of coal supply to feed the project. Sasol wants a guarantee in supply with at least 2 billion coal reserve.

Not strictly coal related, but Central Petroleum knows how to keep the punters happy.

The "Daily RNS" ... (pink ones are "price-sensitive")

From http://www.stocknessmonster.com/news-history?S=CTP&E=ASX

18th Sep '10

Header updated.

Removed Arrow Energy, and added Dart Energy into which Arrow's rump explo assets have been spun off.

Also removed Spitfire Oil, which is now a gold explorer, and Bio Clean Coal which seems to have disappeared.

One news item of UK relevance. The above mentioned Dart Energy has taken a 10% stake in private Scottish outfit Composite Energy.

http://www.composite-energy.co.uk/page-20100903-134519.html

26th Oct '10

Yet another JV between an Aussie CTL company and the Chinese.

From Syngas Ltd (ASX:SYS):-

"MoU with CNEEC over the Clinton Coal to Liquid Project"

http://www.stocknessmonster.com/news-item?S=SYS&E=ASX&N=511741

28th Oct '10

Well the market certainly took a shine to that announcement from Syngas. The stock was up overnight 158% on volume of 260m shares, which exceeds the total number of shares in issue. Day traders eh?

http://finance.yahoo.com/q?s=SYS.AX

Even with this large rise, the market cap of SYS is still only around A$8-10m. If the Clinton project ever does come to fruition, with the Chinese sorting out debt funding of up to 85%, that valuation might look a bit silly.

10th Feb '11

Clean Global Energy have signed a "Technology Licensing Agreement" with Indian oil major Essar.

http://www.stocknessmonster.com/news-item?E=ASX&S=CGV&N=528458

The market likes it, and so do I FWIW. For a $10m company that is one big partner to have.

Meanwhile, Linc Energy has released some cryptic stuff about their first conventional gas well in Alaska.

http://www.stocknessmonster.com/news-item?E=ASX&S=LNC&N=228937

I am clueless about these things but it looks like they may have over 1,000m depth of possible gas containing sands (not all of which will be "pay zones"). Flow tests have been delayed by the winter but are now scheduled for March time. Quite promising I suppose?

Remember Linc is just using conventional oil, gas and coal to bootstrap it's UCG world domination plan.

12th Jun '11

Been a while ...

I'm not hugely motivated to keep this thread up in general, but here is a broker report from Madison Williams in the US on Linc Energy.

Amongst other things they've done the sums on Linc's vast assortment of worldwide tenements, and come up with a fairly astounding acreage figure.

In total, we calculate that Linc has more than 21 million acres in oil/gas/coal leases and tenements around the world

http://www.madisonwilliams.com/images/OTCQX/LNCGY%20-%20MW%20Initiation%20Report.pdf

13th Jun '11

While I'm here ...

If you want to look at above-ground CTL in Canada then 49 North Resources (V.FNR) is the kiddie. They have, via stakes in "investee" companies, managed to get their hands on most of the stranded surface-mineable coal in Saskewatchan plus a bit more in Manitoba. This amounts to some number of billions of tonnes. Not quite up to Australian quantities but definitely "not insignificant".

They also have a license agreement with Quantex, the firm which New Hope has partnered with in Oz who have a "coal to bitumen" direct liquefaction process.The idea presumably being to plug into the pre-existing oil sands infrastructure etc.

The company also has a boat load of other investments in conventional oil and gas and various mining projects. It is basically a closed-end fund (investment trust) which currently trades at a massive discount to a grossly under-estimated NAV.

http://www.fnr.ca

12th Jul '11

Here's a new player with a catchy name and a different plan.

ZEEP - Zero Emissions Energy Plants

http://www.zeep.com/zeep-energy-centers/index.php

ZEEP is looking to use a "syngas refinery" business model, where they neither own the base resources or do the conversion to value-added products. Instead they will very simply just refine coal/biomass/whatever into various forms of syngas and then sell this on to people who can afford to construct GTL plants and what have you.

This makes sense to me, and you will even be able to invest in it soon (if you want) as it's coming to the TSX Venture exchange via a reverse takeover of Goldsource Mines (V.GXS).

Coal 2.0 - CBM/CSG, UCG, CTL etc.

Background Information

Listed Companies

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Mattybuoy

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