Altona Energy Regulatory News (ANR)

Altona Energy Plc / Index: AIM / Epic: ANR / Sector: Exploration & Production

Altona Energy Plc Enters into

Coal and Biomass Gasification Cooperation Agreement with Rentech, Inc

Altona Energy Plc, ("Altona" or the "Company") the AIM-listed Australia-based energy company, is pleased to announce that it has entered into a cooperation agreement (the "Agreement") with U.S. based clean energy company Rentech, Inc ('Rentech'), owner of proprietary technologies for the Fischer-Tropsch Process ('FT Process') and the gasification of biomass to produce Synthesis Gas ("Syngas"). The conditioned Syngas, when used with the FT Process and upgrading technology, produces drop-in transportation fuels such as low sulphur diesel and aviation fuels. Rentech's gasification technology can process biomass such as waste renewable organic materials, such as wood or wood bi-products, agricultural crops or wastes, and municipal green wastes.

The Agreement with Rentech includes working together to evaluate coal and biomass gasification projects for the application of Rentech's technologies in South Australia, where the Arckaringa Project is located. The Arckaringa Project is the Joint Venture between Altona and CNOOC-NEIA (a subsidiary of Chinese oil major CNOOC) to evaluate the development of the estimated 7.8 billion tonne Arckaringa coal resource (of which 1.287 billion tonnes is JORC compliant). The current base case for the Arckaringa bankable feasibility study ('BFS') is a 10 million barrel per year coal-to-liquids ('CTL') plant (applying the FT Process) and 560MW co-generation export power facility.

The Company believes that there are significant potential synergies in the evaluation of the gasification of biomass in conjunction with the gasification of coal at the Arckaringa Project, for the production of energy products, including diesel, jet fuel, naptha and electricity.

Rentech owns proprietary iron catalyzed, slurry bed FT Process, which may be used to produce various FT intermediate hydrocarbon products from Syngas. Rentech also owns the Rentech-SilvaGas process technology for the gasification of biomass to produce Syngas. In addition, Rentech has a strategic partnership agreement with UOP, LLC, a division of Honeywell International ("UOP"), which provides for UOP to offer access for the use of UOP's technologies for Syngas conditioning and for upgrading FT intermediate hydrocarbon products into commercial grade products such as transportation fuels and chemical grade naphtha.

Peter Fagiano, Executive Director of the Company responsible for Project Technology said: "This is an exciting opportunity to further work with Rentech in evaluating the application of their technology. Rentech's technology is not only suitable for the Arckaringa CTL project but also for biomass derived Syngas for the production of renewable diesel where Rentech also has its own proprietary biomass gasifier. I have been associated with Rentech in the application of their FT Process technology since 2001 and I welcome the opportunity to augment this relationship in evaluating the gasification of biomass in addition to the gasification of coal at Arckaringa and South Australia."

Chris Lambert, Chairman of Altona, commented: "Our agreement with Rentech reflects the increasing demand for the production of transportation fuels through the FT Process, utilising coal and biomass feedstocks. Aviation fuels produced using Rentech's technology and carbon capture and sequestration, has a lower carbon footprint as well as lower regulated emissions compared to traditional aviation fuel. The gasification of biomass presents an alternative method of disposing of waste and reducing the need for landfill solutions. The production of clean energy products from biomass, alongside those produced from the Arckaringa CTL plant would further contribute to South Australia's energy security."

The potential of Rentech's biomass gasification technology was highlighted in November 2010, with the agreement between Rentech and Solena Group, Inc. ('Solena'), a zero emission bioenergy company, regarding the potential establishment of Europe's First Commercial Scale Sustainable Jet Fuel Facility in the UK utilising Rentech's FT Process synthetic fuel technology. Solena's sustainable BioJetFuel project, GreenSky, plans to convert more than 500,000 metric tonnes of waste biomass feedstock per annum into a synthesis gas every year, using Solena's proprietary plasma gasification technology. The BioSynGas could then be processed by Rentech's FT Process and UOP technologies into 16 million gallons of sustainable synthetic aviation fuel and nine million gallons of BioNaphtha. It is envisaged that the facility will also export more than 20 megawatts of baseload renewable power to the grid after powering the entire facility with clean electricity.

**ENDS**

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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-NEI, 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-NEI 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-NEI 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.

Rentech

Rentech, Inc. (www.rentechinc.com), incorporated in 1981, provides clean energy solutions. The Company's Rentech-SilvaGas and Rentech-ClearFuels biomass gasification processes can convert multiple biomass feedstocks into synthesis gas (syngas) for production of renewable fuels and power. Combining the gasification process with Rentech's unique application of syngas conditioning and clean-up technology and the patented Rentech Process based on Fischer-Tropsch chemistry, Rentech offers an integrated solution for production of synthetic fuels from biomass. The Rentech Process can also convert syngas from fossil resources into ultra-clean synthetic jet and diesel fuels, specialty waxes and chemicals. Final product upgrading and acid gas removal technologies are provided under an alliance with UOP, a Honeywell company. Rentech develops projects and licenses these technologies for application in synthetic fuels and power facilities worldwide. Rentech Energy Midwest Corporation, the Company's wholly-owned subsidiary, manufactures and sells nitrogen fertilizer products including ammonia, urea ammonia nitrate, urea granule, and urea solution in the corn-belt region of the central United States. Rentech has been recognized by Biofuels Digest as one of the "50 Hottest Companies in Bio-energy" and has been named as one of the "Biofuels Digest Companies of the Year" for its innovations and achievements, particularly in aviation biofuels.

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.