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OIL and gas company Linc Energy said that Indonesian mining firm PT Sugico Graha will license Linc's proprietary underground coal gasification (UCG) technology for its projects in Indonesia.
Sugico will pay Linc a licence fee of US$17.5 million in two tranches subject to various criteria, as well as a production payment, or royalties, of US$0.3125 per million British thermal units (mmBtu) of synthesis gas.
Sugico is in the early stages of developing two commercial UCG projects in Indonesia.
The first, in South Sumatra, will use UCG-produced synthesis gas to generate electrical power. The first phase of this project is expected to reach financial closures in 2016 and achieve its specified performance during 2017.
The second, in South Kalimantan, will use UCG-produced synthesis gas to produce chemicals. It is in the concept phase of development, expected to reach financial closures in 2017 and achieve specified performance in 2020.
Linc Energy last traded on Thursday at S$0.061, up S$0.002 or 3.4 per cent, before this latest announcement.