Chinchilla’s UCG facility closed down and moved offshore due to Govt red tape

Chinchilla’s UCG (Underground Coal Gasification) demonstration facility will be closed down and shipped to Asia due to what owners, Linc Energy, describe as unfair and unreasonable treatment by the Queensland State Government.

Linc Energy today announced its intention to move offshore despite describing the project as being a ‘profound success’ at its current site.

Peter Bond, Chief Executive Officer of Linc Energy, said he was personally very disappointed that the company was forced into making the decision.

“…due to regulatory uncertainty in Queensland over the last several years in particular, I do not believe that we have been afforded a level playing field or offered a ‘fair go’ with access to the basic right of statutory due process.”

“As a result, the Board has taken the heavy decision to continue to drive the UCG business offshore, thereby ensuring the future deployment of UCG in regions like Asia, which are seeking long-term energy security and cost independence from rising prices of natural gas and LNG.

“The decommissioning of Chinchilla is an emotional event for the Company and for me personally.  We have spent many years and a lot of money and effort developing something unique and special in the form of UCG at Chinchilla. I had hoped that this would be something that all Australians could be proud of and that would continue to grow and expand for many years to come. However, due to the lack of industry structure, we have now been forced overseas.”

Commenting further, Peter Bond added:

“The reality is that UCG is now developing as a global industry. Queensland may have given birth to what is a fast growing energy platform, but it is other nations that are short of gas yet have substantial coal resources that will benefit, such as Poland, China, Hungary, Ukraine, South Africa and Vietnam to name a few.

Linc Energy has been conducting UCG operations at Chinchilla since late 1999, with five generations of UCG designs tested and operated. The company claims the UCG process it developed is predictable, safe and environmentally sound. They also claim their process uses significantly less land than other competing unconventional gas processes, such as Coal Seam Gas (CSG) operations, with minimal surface disturbance, and is capable of producing substantial quantities of gas from previously uneconomic or stranded coal resources at a low cost.