Cougar Energy and Eneabba Gas have signed an agreement to develop an Underground Coal Gasification (UCG) joint venture in the Mid-West region of Western Australia.
This memorandum of understanding specifies that both parties will sign off on the joint venture agreement with the next 60 days.
Upon singing the joint venture, Cougar will be entitled to 50% of Eneabba’s Sargon tenement.
The companies will conduct exploration drilling, test work and studies from the middle of the year to determine the potential of the project.
The project will also feature a power station fuelled by the UCG feedstock.
Cougar has been looking to expand its UCG portfolio into WA for some time.
“The Sargon tenement coal resource near Dongara in WA exhibits good potential for a long-life UCG project,” the company’s managing director Dr Len Walker said.
“The technology and know-how of our UCG partner Ergo Exergy Technologies 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, we are seeing a number of resources projects announced in the Mid-West of the State, 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.”