Underground coal gasification and its relevance for Ukraine

One of our clients is Wildhorse Energy, the AIM and ASX listed company focused on development of underground coal gasification (UCG) projects in Central and Eastern Europe. We follow with big interested development of the first project of such type in our region – Mescek Hills UCG Project in Hungary. Detailed information on the current status of this project is presented here.

UCG is an in-situ gasification process whereby underground coal seams are converted into synthesis gas (syngas) through the injection of oxidants delivered via an injection well.  The syngas is then delivered to the surface via a production well to be used as a fuel feedstock for electricity generation and various energy products.  This process, which utilises between 70-95% of coal within the seam, is controlled remotely and does not require man access or other costly infrastructure in comparison with traditional methods of mining.

Application of UCG considerably reduces the environmental impact of harnessing the energy value of the coal and disruption to the surface of the land is lessened significantly in comparison to disruption caused by traditional extraction methods like opencast or shaft mining. UCG technology can also be applied to coal assets that would otherwise be unprofitable or too complicated to extract through traditional mining methods.

Therefore, we believe that application of such technology can bring significant value for Ukraine as production of coal in many areas is not cost efficient and/or is associated with significant danger for coal miners or negative impact on environment. Moreover, received syngas can be used for electricity production at CCGT or CHP plants with the production cost being significantly lower than the price of electricity produced using natural gas imported from Russia.

More detailed information on Wildhorse Energy and UCG technology can be found here.

PS. Below is the link to the recent news report about DTEK and Linc Energy signing MoU for development of UCG projects in Ukraine:

http://www.4-traders.com/LINC-ENERGY-LTD-6501216/news/Linc-Energy-Ltd-Linc-Energy-and-DTEK-Oil-Gas-Sign-UCG-Agreement-15580691/

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