Cougar to develop underground coal gasification in Indonesia

ASX-listed Cougar Energy Ltd has signed a Memorandum of Understanding (MOU) with mining company PT Medco Energi Mining Internasional, a subsidiary of PT Medco Energi Tbk to assess and identify coal deposits in Indonesia suitable for application of Underground Coal Gasification (UCG) technology.

Both companies will undertake a preliminary study for the commercial development of the underground coal gasification.

The MOU also provides for the potential formation of a joint venture for development of these projects.

Medco Energi Mining has a range of energy interests including domestic and international oil and gas operations, power generation and the development of downstream industries. Medco Energi Mining shares with Cougar Energy the goal of bringing the UCG industry into the mainstream of energy supply in Indonesia, Cougar said.

?Both Medco Energi and Cougar Energy see an immediate need for the provision of cheap and clean sources of power in Indonesia using local coal resources, which would potentially supplement Medco Energi affiliate?s current power generation capacity of around 200 MW,? Cougar said.

The companies have already identified target coal resources and plan to progress the MOU goals rapidly.

This MOU is a significant addition to Cougar Energy?s announced plans for expansion and growth of its UCG businesses in Asia, which are focused on the People?s Republic of China, Mongolia and Indonesia.

Underground coal gasification (UCG) is an industrial process, which converts coal into product gas, which is similar to coal bed methane (CBM). They are different in the technology and mechanism in converting the coal into gas.

In CBM project, groundwater is pumped to the land surface in order for gas to be extracted using coal seam gas techniques. CBM requires lowering groundwater pressure in order to stimulate gas flow.

UCG is an in-situ gasification process carried out in non-mined coal seams using injection of oxidants, and bringing the product gas to surface through production wells drilled from the surface. The product gas could to be used as a chemical feedstock or as fuel for power generation.

Some experts claim that UCG is able to produce 20 times more energy from the same coal resource than what?s possible from CBM.

Cougar Energy has conducted successful pilot projects in Australia. (roffie/romel)