The first commercial Underground Coal Gasification (UCG) to Gas to Liquids (GTL) operation is expected to begin in the Arckaringa Basin in South Australia’s Far North on SAPEX leases recently acquired by Linc Energy Ltd.

Linc Energy’s target, the Arckaringa Basin, has one of the largest contiguous coal deposit in the world. Due to the size of the coal resource, Linc Energy believes that it can support a UCG to GTL (Coal to Liquids) business that would include several 100,000 barrel per day facilities. These facilities would be situated so as to create additional value through location and other synergies.

Linc hopes to develop a number of oil and gas opportunities in the Arckaringa Basin.

The Arckaringa Basin area has access to existing rail and port infrastructure that will assist with movement of materials. The existing infrastructure will support the large volumes of production.

Linc’s spokesman said there will be no relevant overlapping tenement issues as the operation of ‘underground coal gasification’ will operate under petroleum tenements in South Australia with Linc Energy currently holding PEL’s (Petroleum Exploration Licences) over acreage in the Arkaringa Basin.

The decision to locate in the Arckaringa Basin will, above all else, allow Linc Energy to meet commitments to its shareholders.  This and the other drivers outlined will ensure that this decision creates significant value for Linc’s shareholders.

Linc can covert a tonne of coal into 1.5 barrels of diesel (oil) and do so with a lower greenhouse gas footprint than that of the traditional oil industry (refining).

This achievement is what state and world governments are seeking in answering the question of ‘how do we as a country secure our energy (oil) future, yet reduce the current greenhouse gas footprint produced from traditional oil’.

A number of relevant project services will be moved or established in South Australia over the coming weeks and months and is expected to attract significant employment to South Australia, particularly in the technology development, engineering and construction fields.

Linc Energy will continue to maintain its corporate office in Brisbane.

The South Australian Government and PIRSA have been very supportive, reflecting on just how big the coal areas Linc Energy has access to in South Australia.

In terms of coal to liquids production, Linc Energy has initially located at least 8 to 10 key areas capable of operating a 100,000 (one hundred thousand) barrel UCG to GTL facilities for approximately 60 years continuously. That’s over 1 (one) million barrels a day of oil (diesel or jet fuel) production for approximately a generation. 

Linc is not talking about reinventing the 20,000 barrel facility we’ve initially developed. We are literally just going to layout multiple modules of the same 20,000 bpd facility to save time and money.  It will be attractive to shareholders to get a UCG to GTL commercial operation up and operating profitably and quickly in South Australia.

Linc Energy will commence moving additional drilling equipment and some engineers to South Australia within the next four weeks. Linc expects to make another significant coal JORC resource announcement, which will include further developments on its oil exploration program before Christmas this year.

Coober Pedy Regional Times