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Altona signs Chinese gasification deal

Published: 08:59 26 May 2011 BST

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Australian coal business Altona Energy (LON: ANR) has won a deal with China’s Tongjiang International Energy to identify and evaluate coal and biomass gasification projects in China for the production of clean energy and transportation fuels.

Altona, a business that is sitting on what it believes to be a 7.8 billion ton coal resource at the Arckaringa Basin in South Australia, will exploit its experience in coal gasification and project development as well as its key relationships with clean energy technology partners.

The firm made a deal with US-based clean energy business Rentech earlier this month which will see the two firms working together to evaluate coal and biomass gasification projects that can use Rentech’s Fischer-Tropsch process in order to create syngas (synthetic gas).

The deal with Tongjiang, a strategic shareholder in Altona with a 20.9 per cent stake in the business, will involve Tongjiang identifying potential projects in China that it will share with Altona for initial evaluation. Should Altona and Tongjiang decide to proceed further with a particular project both companies will negotiate a joint development agreement for that project.

Despite the new deal, Altona’s executive chairman Chris Lambert says that the principle focus of the company “very much remains” with its Arckaringa Basin coal resource joint venture with China National Offshore Oil Corporation.

Here, Altona believes it has a non-JORC coal resource of 7.8 billion tons (1.3 billion tonnes on a JORC-compliant basis). A study for the company, assuming a 50 per cent conversion of coal-to-liquid fuels and 50 per cent conversion to syngas, found that Arckaringa’s total coal resources (including non-JORC) would represent 28 per cent and 29 per cent of the current North Sea proven reserves of 10.9 billion barrels of oil and 114.8 trillion cubic feet of natural gas respectively.

 

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