Cougar Energy signed a Memorandum of Understanding (MOU) with Eneabba Gas for the establishment of a joint venture to develop an underground coal gasification (UCG) project with an adjoining power station utility in the Mid West of Western Australia.
Exploration drilling, test work and studies to scope the size of the potential UCG project is expected to commence mid-2010. This follows the successful ignition of Cougar’s Kingaroy UCG project in Queensland in March.
Cougar Energy has been investigating for various opportunities to expand its present portfolio of sites and establish its UCG activities in Western Australia.
“We are delighted to have signed this MOU with Eneabba Gas,” Cougar Energy managing director, Dr Len Walker said.
“The Sargon Tenement coal resource near Dongara in Western Australia exhibits good potential for a long-life UCG project. It satisfies all of our preliminary due diligence enquiries. The technology and know-how of our UCG partner, Ergo Exergy Technologies, Inc. is very well suited to exploit this resource.
“The economic growth outlook for Western Australia is positive, driven by the expansion of the resources sector. Similarly in the Mid West of the state we are seeing a number of resources projects announced, which will have significant electricity requirements and can be ideal long-term customers. The prospect of establishing a power generation facility on the tenement accords with our strategy of building energy generation hubs around Australia using syngas as a cost-competitive feedstock,” Dr Walker said.
The formation of the joint venture is subject to the finalisation of the execution of the joint venture agreement by mid-June. Upon signing of the agreement, Cougar Energy will be entitled to 50 per cent of the Sargon Tenement owned by Eneabba Mining, the 100 per cent subsidiary of Eneabba Gas.