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Linc Energy and PT Sugico Graha to develop UCG projects in Indonesia

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World Coal,

Linc Energy Ltd has entered into formal agreements with PT Sugico Graha (Sugico) to license Linc Energy’s proprietary underground coal gasification (UCG) technology in Indonesia.

Sugico is in the early stages of developing two commercial UCG projects in Indonesia. The initial project, located in South Sumatra, will use UCG produced synthesis gas to generate electrical power. This project is in the concept phase of development. Currently, the first phase of the project is expected to be sanctioned and reach financial closure during 2016 and achieve designed specified performance during 2017.

The formal agreements consist of an Intellectual Property License Agreement supported by a services agreement.

The main feature of the agreements include:

  • A license to use and exploit Linc Energy’s intellectual property (IP Licence), within Indonesia.
  • Sugico to pay a License Fee of US$17.5 million for the UCG license upon achievement of agreed milestones and an ongoing royalty for the synthesis gas produced by UCG.
  • Production payment (royalty) of US$0.3125/million BTU of Syngas.
  • Sugico will pay Linc Energy for any services provided in relation to the development of any UCG projects at commercial rates.

Surgico’s second project is located in South Kalimantan and will use UCG produced synthesis gas to produce chemicals. This project is currently in the concept phase of development, but is expected to be sanctioned in 2017, reach financial close during 2017 and achieve designed specified performance by 2020.

Linc Energy’s CEO & Managing Director, Craig Ricato said: “Our agreement with Sugico to develop commercial UCG projects in Indonesia is an exciting development for the Company and its shareholders. This agreement has been achieved after a lengthy technical evaluation process by both parties and delivers a key strategic milestone in the commercialisation of our proprietary UCG technology in Asia. We are extremely pleased to have the opportunity to work closely with Sugico to deliver projects in Indonesian whilst we continue to develop further opportunities in the Asian market.”

Edited from press release by Harleigh Hobbs

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