LINC SECURES CHINESE BACKING FOR GAS VENTURE

Written on the 20 April 2012

LINC SECURES CHINESE BACKING FOR GAS VENTURE

QUEENSLAND-based Linc Energy (LNC) has partnered with a Hong Kong-based suitor and secured a new pact to commercialise underground coal gasification (UCG) to gas to liquids (GTL) in mainland China.

ASX-listed Linc Energy’s joint venture with the Golden Concord-owned GCL Projects will oversee site selection and construction of four UCG gasifiers in China with potential to expand to six. Works will begin within six months after binding legal agreements are finalised.

LNC will have a 33 per cent stake in the JV while GCL will own 67 per cent.

“This relationship significantly revalues Linc Energy's key UCG to GTL technology base,” says CEO Peter Bond (pictured) in an ASX statement.

“This most recent deal with GCL in China is the first stepping-stone of many commercial opportunities. I believe you will see Linc Energy produce over the months ahead.”

Bond reveals China has always been a key market for LNC’s UCG and GTL operations.

“China’s insatiable appetite for liquid fuels and gas presents Linc Energy and GCL with a unique opportunity to capitalise on this world changing market,” he says.

“Linc Energy chose GCL as its partner in China for … its strong financial position, its proven ability to execute large projects in a fast and cost effective manner and its history of protecting its own world leading intellectual property.”

Solar energy developer GCL employs 17,000 people and is listed on the Hong Kong Stock Exchange. It has interests in power generation and coal production with an equivalent $4.1 billion market capitalisation.

LNC employs 464 staff and recorded $3.1 billion in revenue for the 2011 financial year, representing a 157.9 per cent jump on the previous fiscal period. Net profit after tax was $296.4 million – a turnaround from its FY10 loss of $16.2 million.

The agreement allows both companies to cooperate on LNC’s UCG to GTL process in Chinchilla, Queensland. GCL will take a $120 million private placement at $4.50 per unit in LNC in return for 5 per cent of issued share capital, while providing an equivalent $14.4 million in working capital to the JV for the first three years.

LNC will also grant an exclusive licence to the JV for using UCG and GTL intellectual property in China.

The deal is pending Foreign Investment Review Board approval in Australia and completion of legal documentation.

LNC shares weakened slightly today to $1.24 per unit.


Latest News

THE STAR'S STUNNING ANSWER TO CROWN'S BARANGAROO

THE Star Entertainment Group (ASX:SGR), not to be outdone by James Packer's Barangaroo development across the ...

BRISBANE COAL TERMINAL REOPENS AFTER SHIPLOADER REPAIR

COAL loading has recommenced at New Hope's (ASX: NHC) Brisbane terminal today after repairs to its ship loader, w...

SUPERYACHTS OFFER UNTAPPED POTENTIAL AT COMMONWEALTH GAMES

SUPERYACHT Australia has devised a strategy to attract more superyachts to Queensland and capitalise on revenue op...

GDP FIGURES A 'WAKEUP CALL' FOR PARLIAMENT

THE GDP figures are an end-of-year wakeup call for Parliament about what lies ahead for the country, according to ...

Related News

HOW MCDONALD'S AUSTRALIA REDISCOVERED ITS INNOVATIVE SPIRIT

MCDONALD'S is such a ubiquitous part of the Australian landscape today that it is easy to forget how it change...

JB HI-FI IS THE GOOD GUY IN $870 MILLION ACQUISITION

ELECTRONICS giant JB Hi-Fi has formally completed its $870 million acquisition of home appliance chain The Good Gu...

ACCC ACTS AGAINST MERITON'S RIGGED REVIEWS

MERITON Property Services is under fire from Australia's main consumer watchdog, after it allegedly engaged in mi...

ACCC FIRES WARNING SHOT TO IVF PROVIDERS

IVF clinics have been put on notice by consumer watchdog, the Australian Competition and Consumer Commission (ACCC...

Contact us

Email News Update Sign Up Contact Details

Subscribe to our mailing list

* indicates required
Email Format

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter