Australia's Carbon Energy to Form China Gas JV

Carbon Energy on Monday announced it will seek approval from shareholders to form a gas business joint venture in China with Kam Lung Investment Development Company.

Kam Lung will also increase its interest in the Carbon Energy to 19.99 percent.

The first goal of the joint venture would be the establishment of a demonstration facility in China, Carbon said. The joint venture will be formed only on receipt of approval from China’s Ministry of Commerce which, the company expects, would be granted before the end of the first quarter of 2016.

“China is a key market for Carbon Energy and the company’s strategic vision for the region is shared by Kam Lung. The Chinese government is embarking on its own climate protection strategy and embracing cleaner coal technologies which provides for a stable Governmental platform from which to grow the joint venture,” Carbon said.

In 2016 Kam Lung and Carbon Energy will seek to form a Beijing incorporated contractual joint venture for the development of a demonstration project in China. The objective of the joint venture will be to commercialise Carbon Energy’s In-Situ Gasification (ISG) technology and to form a new vertically integrated gas business that will seek to develop its own projects within the region.

Kam Lung will capitalise the joint venture to $30 million (A$40 million) over a three year period to achieve its initial goal of developing a demonstration project within 18 months of establishing the joint venture.

Carbon Energy is developing the Blue Gum Underground Coal Gasification (UCG) project in Queensland, Australia.