Missing Linc: Aussie energy innovator goes for global oil, gas, coal opportunities

LINC Energy is to shift its stock market listing from the Australian Securities Exchange to Singapore in a re-focus on global oil, coal and gas opportunities for its technologies, while many other Australian projects are languishing.

 

 

Peter Bond's Brisbane-headquartered Linc Energy listed on the ASX in 2006 and has since developed a strong and diversified  portfolio of conventional and unconventional oil, gas and coal assets, located near population centres across Australia, Asia, Europe, Africa and the USA.

Linc is probably best known for its successful proprietary underground coal gasification (UCG) technology, which is to be deployed away from Queensland to Asia as part of the restructure and as a result of government inaction in approving its use in Australia.

Linc Energy CEO Mr Bond said the UCG technology was particularly relevant in Asia, "where demand for energy is expected to increase faster than anywhere else in the world and where gas is destined to fulfil an increasing proportion of energy needs".

To position Linc Energy to take advantage of this opportunity, the company will list its shares on the Main Board of the Singapore Exchange Securities Trading Limited (SGX) immediately after delisting them from the ASX.

Linc Energy announced early in November its intention to close its UCG research and development facility at Chinchilla, Queensland, and relocate its UCG operations overseas, with Mr Bond expressing frustration that this world-leading technology would not benefit Australia first.

"The decommissioning of Chinchilla is an emotional event for the company and for me personally," Mr Bond said in a recent company briefing. "We have spent many years and a lot of money and effort developing something unique and special in the form of UCG at Chinchilla.

"I had hoped that this would be something that all Australians could be proud of and that would continue to grow and expand for many years to come. However, due to the lack of industry structure, we have now been forced overseas."

UCG research was initiated by the Queensland Government as a technology which would enable the monetisation of the State's vast stranded coal resources. Mr Bond said so far the government had been unable to provide the UCG industry with any material certainty capable of supporting commercial investment in UCG in Queensland.

 

"As a result, the board has taken the heavy decision to continue to drive the UCG business offshore, thereby ensuring the future deployment of UCG in regions like Asia, which are seeking long-term energy security and cost independence from rising prices of natural gas and LNG."

The stock market move from Australia comes after the successful completion of the continuous two year operation of Linc Energy's UCG Gasifier 5 (G5) at its world-leading Chinchilla facility. The completion of G5 operations marked the end of nearly 14 years of operational trials and technology, research and development by Linc Energy.

"The Chinchilla UCG site has been a profound success in many ways, particularly in bringing UCG into the 21st Century as a safe, repeatable and cost-effective operating gas platform," Mr Bond said.

"G5, together with our earlier gasifiers, has made significant achievements, and it is with regret that we will be taking this technology offshore."

Mr Bond said Linc Energy had proven its UCG process as predictable, safe and environmentally sound. It uses significantly less land than other competing unconventional gas processes, such as coal seam gas (CSG) operations, with minimal surface disturbance, and was capable of producing substantial quantities of gas from previously uneconomic or stranded coal resources at a low cost.

G5's two-year technology development program is now complete, and the company is transitioning to the final phase of site decommissioning and remediation.

Mr Bond said Linc Energy would continue to be an Australian company, headquartered in Brisbane, and would continue to develop its other assets in Australia along with its global expansion.

"I'd like to reiterate that I believe very strongly that by listing on the SGX, Linc Energy will be able to unlock shareholder value and have improved ability to access capital markets going forward," he said. "This is an important opportunity for all of us to develop Linc Energy into the global energy business we know and intend it to be.

"We will continue to be a proud Australian company and our headquarters will remain in Brisbane. Interestingly, approximately 40 percent of the 750-plus listed companies listed on the SGX are headquartered overseas.

"We will continue to invest in and develop our Australian assets, including our shale oil leases in South Australia's Arckaringa Basin which cover approximately 16 million acres, as well as continue to develop and expand our Clean Energy (UCG) business," Mr Bond said.

"We also have plans to develop our coal portfolio and, at an appropriate time, to divest or demerge these assets to establish a pure-play Australian coal company.

"The reality is that UCG is now developing as a global industry. Queensland may have given birth to what is a fast growing energy platform, but it is other nations that are short of gas yet have substantial coal resources that will benefit, such as Poland, China, Hungary, Ukraine, South Africa and Vietnam to name a few."

Mr Bond described the changes as "an exciting time for Linc Energy and its Clean Energy Division".

"With Asia requiring huge amounts of gas and Linc Energy's ability to produce clean (synthetic) natural gas, this move signifies a material step towards the recognition of UCG as a viable, economic and efficient process of gas production on a global scale.

"There is still a possibility we will continue Chinchilla in a research and training capacity, depending on final discussions with the Queensland Government."

Linc Energy has also recently progressed its arrangements with Exxaro Resources in Africa.

In May 2013 Linc and Exxaro Resources signed formal agreements to jointly develop its first UCG project in Sub-Saharan Africa, covering intellectual property and services agreements.

The concept study consists of exploration and detailed geological analyses, the UCG process, and downstream power generation packages. The study work being done by the joint Linc Energy and Exxaro Resources teams is focused on the development of a power plant with a nominal send-out capacity of between 200 to 250 MWe. The delivery of the study is planned for the end of 2013.

In another significant move, Linc Energy announced in October that its wholly-owned subsidiary New Emerald Coal Ltd had entered into a sale and purchase agreement (SPA) to acquire the Blair Athol Mine tenure from the Blair Athol Coal Joint Venture (BACJV). The Central Queensland Blair Athol Mine ceased operations in November 2012.

There is no upfront cost for the acquisition by New Emerald Coal which includes the mining tenure, on-site assets and infrastructure. BACJV will make a contribution to New Emerald Coal towards site rehabilitation obligations, commencing in 2016. There is provision for commercial agreements to be put in place that give New Emerald Coal access to train-loading capacity, workforce accommodation and port and rail capacity to Abbot Point.

New Emerald Coal expects the acquisition to become unconditional within six months and mining to recommence shortly after. New Emerald Coal will reopen the mine with a view to produce up to 3 million tonnes of thermal coal per year.

http://www.lincenergy.com/

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