1 Jun 2010 07:00
Altona Energy Plc / Index: AIM / Epic: ANR / Sector: Exploration & Production
1 June 2010
Altona Energy Plc ('Altona' or 'the Company')
CNOOC-NEIA - Successful FIRB Assessment
Altona Energy Plc, the AIM listed Australia-based energy company, is pleased to announce that CNOOC New Energy International (Australia) Pty Ltd ('CNOOC-NEIA'), has received notification from the Foreign Investment Review Board ('FIRB') that there is no objection under Australia's Foreign Investment Policy for its participation in and establishment of the Arckaringa Unincorporated Evaluation Joint Venture ('the JV').
Formed specifically for the JV with Altona, CNOOC-NEIA is an Australian subsidiary of CNOOC-NEI, one of China's major oil companies. Following the FIRB assessment, the JV is able to proceed on the terms agreed, the first step of which is for CNOOC-NEIA to provide the funding for the completion of a Bankable Feasibility Study ('BFS') for the commercialisation of the Arckaringa Project.
Altona Chairman Chris Lambert said, "The success of CNOOC-NEIA's formal application to FIRB represents a crucial milestone for the JV as it opens the gate for the full mobilisation of JV resources and advancement of the BFS for the Arckaringa Project. CNOOC-NEIA is now able to release the capital required for the all-important BFS, which will determine the most profitable applications for our 7.8 billion tonne coal resource.
"Work will shortly commence on the BFS by the joint operating team. There is a great deal of value adding activity to be undertaken throughout 2010 and we are delighted to be able to move forward with vigour after many years of solid preparation."
About the Altona / CNOOC JV
In April 2010 CNOOC-NEIA and Arckaringa Energy, Altona's operating subsidiary in Australia, formalised the JV to complete a BFS assessing the exciting multiple project potential for the Arckaringa Project, focused on the commercialisation of an estimated 7.8 billion tonne coal deposit in the Arckaringa Basin of South Australia, of which 1.287 billion tonnes is a JORC-compliant resource. The Board believes that the JV has significantly reduced risk to Altona shareholders and secured both funding and a strong partner; not only to carry out the staged evaluation work of the BFS, but also to take responsibility for the evaluation of coal development, coal to liquid ('CTL'), synthetic natural gas, power co-generation and other potential clean energy projects.
The base case developed from pre-feasibility studies covers a 10 million tonne per annum open cut mine based on the Wintinna coal deposit, to feed:
·; A CTL plant producing 10 million barrels of distillate per annum; primarily zero sulphur diesel fuel, alongside by-products including naptha, sulphur and water; and
·; An integrated gasification combined cycle plant producing 560 MW of power available for export.
The important next phase of work under the BFS, estimated to take 12-15 months, is scheduled to cover the key steps of mine design and planning, groundwater engineering, base line environmental field work and transport and infrastructure options studies, all of which will underpin the follow-up engineering of the coal conversion plant and other projects. The intention is that once the BFS is completed, the JV will be in the position to take forward not only an internationally significant CTL and power project but other high-value projects as well.
**ENDS**
For further information visit www.altonaenergy.com or please contact:
| Christopher Lambert | Altona Chairman | Tel: +44 (0) 20 7024 8391 |
| Christopher Schrape | Altona Managing Director | Tel: +44 (0) 20 7024 8391 |
| Simon Edwards | Evolution Securities Ltd | Tel: +44 (0) 20 7071 4300 |
| Tim Redfern | Evolution Securities Ltd | Tel: +44 (0) 20 7071 4300 |
| Paul Youens | St Brides Media & Finance Ltd | Tel: +44 (0) 20 7236 1177 |
| Hugo de Salis | St Brides Media & Finance Ltd | Tel: +44 (0) 20 7236 1177 |
Notes
Altona Energy Plc is an AIM listed Australian based energy company. Its asset is an estimated 7.8 billion tonne coal resource (non-JORC) in the Arckaringa Basin of South Australia (JORC-compliant: 1.287 billion tonnes). This is considered by the Board to be one of the world's largest untapped energy banks. Per Jacobs Engineering's study for the Company, assuming a 50% conversion of CTL fuels and 50% to synthetic gas ('Syngas'), Arckaringa total coal resources (both JORC and non-JORC) would represent respectively 28% and 29% of current North Sea remaining proven reserves of 10,900mb of oil and 114,800 bcf of natural gas.
Altona has already accomplished a number of key phases in its development:
·; The Company has agreed the terms of a joint venture agreement with CNOOC-NEIA, a subsidiary of Chinese oil major China National Offshore Oil Corporation, to accelerate the Arckaringa Project towards commercialisation.
·; Under the terms of the agreement, CNOOC-NEIA will fund the bankable feasibility study ('BFS') for a coal mine and an integrated value-added project.
·; The current base case is a 10mb per year CTL plant and 560MW co-generation power facility.
·; CNOOC-NEIA will also act as the operator and take responsibility for assessing the full potential of the coal resource, in return for a 51% interest in the exploration licences.
·; It is envisaged that numerous new additional projects may also be opened up to create a multi-project, multi-national business.
CTL
The quality of the Company's coal is suitable for conversion to synthetic gas ('Syngas'), using existing commercial CTL technologies. The process involves two major stages;
1. gasification to produce Syngas rich in hydrogen and carbon,
2. a liquefication stage where the Syngas is reacted over a catalyst to produce high quality, ultraclean synthetic fuels and chemical feedstocks.
CTL is a prime example of clean coal technology - the associated combined cycle units produce negligible sulphur oxides, significantly less nitrogen oxides and 10-20% less CO2 per unit of power generated than a conventional coal fired plant, whilst carbon capture and storage offers the potential to reduce the overall greenhouse gas emissions from CTL to below the 'well to wheel' level of fuels derived from crude oil. The technology is best demonstrated in South Africa, where currently 30% of the country's gasoline and diesel fuel needs are met through CTL plants.