Carbon Energy Says its Underground Coal Gas Has Viable Market

Carbon Energy has said that its strategy to produce cost-effective Synthetic Natural Gas (SNG) from UCG syngas has received a major boost following completion of a study conducted by Brisbane based process engineering specialists LogiCamms.

The report produced capital and operating cost estimates at a Front End Loading (FEL) for the manufacture of pipeline quality natural gas from UCG syngas at a proposed plant at Carbon Energy's Bloodwood Creek site, 45km west of the Queensland township of Dalby.

Capital cost and operating cost estimates for an 8 PJ per annum and a 25 PJ per annum case were analysed for an integrated UCG field and downstream SNG production plant to assess the economic viability of a potential project.

The cost of producing pipeline quality natural gas from Carbon Energy's UCG Syngas was estimated to be in the range of $3.50/GJ to $4.50/GJ, excluding carbon tax and other taxes.

This compares to Queensland government’s recently forecast contract natural gas prices of $6.50/GJ to over $10.00/GJ by 2015.

"We now have an independent assessment of the capital and operating costs for manufacturing pipeline quality natural gas utilising our proven UCG technology,'' Managing Director for Carbon Energy, Andrew Dash said.