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NITROGEN: Time to Start Researching Your Local UCG Players!

Underground Coal Gasification (UCG) - if you don't know what it is, learn about it ASAP ...

Incitec Pivot to form JV with Metex
May 5, 2008

By a staff reporter

Incitec Pivot Ltd will partner with Metex Resources Ltd through an $11 million share placement and joint venture to commercialise Metex's underground coal gasification (UCG) venture in Queensland.

The fertiliser maker and supplier will subscribe for 55 million Metex shares and gain exclusive global rights to its UCG technology for manufacturing ammonia and ammonia derived products, Incitec said in a statement to the ASX. Metex will keep the tights to use syngas from UCG for all other products including coal to liquids and power generation.

“This is a major development for the company and we are pleased to have the strategic backing of such a large and well-respected company as Incitec Pivot as we commence this landmark trial”, said Metex managing director Ian Walker.

“Metex has positioned itself as a trailblazer in the development of UCG projects on a commercially viable level, with the UCG technology offering the potential to significantly reduce the cost of introducing new clean coal technologies, by cutting costs of the coal gasification phase,” said Mr Walker.

The companies intend to exploit Metex's UCG technology by making new manufacturing facilities for ammonia and providing UCG syngas to Incitec's existing ammonia manufacturing facilities, said Incitec.

They plan to investigate the viability of a 1,000 tonne per day ammonia plant, for which Incitec will have off-take rights based on syngas production from Metex's Bloodwood Creek coal resource.

Metex has defined a 100 million tonne inferred coal resource at Bloodwood Creek, from which it will quarantine enough coal for an ammonia plant and related facilities for 30 years. The coal resource is expected to increase with further drilling, said Metex in a statement to the ASX.

Incitec will hold a minimum 10.5 per cent equity in Metex, and joins CSIRO as a major shareholder.

Metex, soon to be renamed Carbon Energy Limited, agreed to take full ownership from CSIRO of their 50/50 joint venture company, Carbon Energy Pty Ltd.

The agreement is subject to completion of due diligence and shareholder approval. Incitec will also have the right to nominate a board member to the Metex board.



http://www.businessspectator.com.au/bs.nsf/Article/Incitec-Pivot-to-form-JV-with-Metex-EBV2C?OpenDocument