OREANDA-NEWS. December 06, 2012. DTEK and Linc Energy (Australia) agreed to cooperate on the application of underground coal gasification (UCG) technology in Ukraine for the production of synthesis gas that can replace expensive natural gas imported from abroad. The two parties signed a Memorandum of Understanding and an agreement for the development of a provisional feasibility study for the project in November.

 Maxim Timchenko, DTEK’s CEO, and Adam Bond, Clean Energy’s President (Clean Energy is Linc Energy’s business division dealing with UCG technology) discussed project milestones and prospects for developing the technology today at a meeting in Donetsk.

 “Cooperation with Linc Energy allows for a new way of looking at the issue of efficiently and safely utilizing Ukraine’s proven coal reserves,” said Timchenko. “Environmentally friendly production of syngas will enable us to exploit coal reserves that cannot be developed by traditional mining methods. In addition, UCG gives new life to gas-based electricity generation projects. All of this will help to reduce the energy dependence of Ukraine. The Company continues its policy of utilizing domestic coal and alternative energy sources. We expect syngas production will start in 2014.”

 “Linc Energy has invested heavily into the development of UCG technology, said Clean Energy’s Bond. “The company has been producing syngas from its Australian facility at Chinchilla for 12 years. Linc Energy was also the first in the world to implement integrated cycle syngas production in 2009, with further gas transformation into liquid hydrocarbons with Gas-to-Liquids (GTL) technology – producing synthetic oil and subsequently synthetic diesel. With oil and natural gas becoming increasingly more expensive today, more countries and companies are beginning to show interest in UCG. DTEK has become a pioneer in this field in Ukraine.”

 DTEK has been studying options for applying UCG technology at its coal enterprises for several years now. Following this review, Linc Energy was selected as the market leader in UCG technology and as D.TEK's partner of choice. Experts from the Dnipropetrovsk National Mining University were involved in the study. Preliminary results and calculations indicated promise in terms of viability of the technology. According to expert estimates, the production cost of syngas is lower than that of shale gas and is closer to that of natural gas produced in Ukraine.

 The uses for syngas are not limited to the power industry; it can be used for the production of motor fuel, oils, fertilizers, and pharmaceutical components.

 DTEK’s subsidiary DTEK Oil & Gas will be in charge of the UCG project.