CNOOC and Altona Energy receive approval for joint venture
Altona Energy (LON:ANR) confirmed that it’s proposed joint venture
partner, China National Offshore Oil Corporation (CNOOC) (NYSE:CEO) has
been formally approved by the Australian authorities.
The Foreign
Investment Review Board ('FIRB') confirmed that there was no objection
under Australia's Foreign Investment Policy. Consequently, the Chinese
partner can now provide funding and the JV can proceed with the
advancement of the massive Arckaringa coal and power project.
The
newly formed, Australian incorporated subsidiary CNOOC New Energy
International Australia (CNOOC-NEIA) and Altona formalised the terms of
the JV in April 2010. The JV is focused on the commercialisation of an
estimated 7.8 billion tonne coal deposit in the Arckaringa Basin of
South Australia.
"The success of CNOOC-NEIA's formal application
to FIRB represents a crucial milestone for the JV as it opens the gate
for the full mobilisation of JV resources and advancement of the BFS for
the Arckaringa Project”, Altona Chairman Chris Lambert commented.
The Arckaringa Project currently has a 1.287 billion tonne
JORC-compliant resource, and the JV plans to complete a bankable
feasibility study to take the project forward. “CNOOC-NEIA is now able
to release the capital required for the all-important BFS, which will
determine the most profitable applications for our 7.8 billion tonne
coal resource ... Work will shortly commence on the BFS by the joint
operating team”, Lambert added.
According to Altona, the JV has
significantly reduced its risk and it secures a strong development
partner, who will also take responsibility for the evaluation of coal
development, coal to liquid ('CTL'), synthetic natural gas, power
co-generation and other potential clean energy projects.
The base
case developed from pre-feasibility studies covers a 10 million tonne
per annum open-cut mine based on the Wintinna coal deposit. It is
anticipated that the coal mining operation will feed a CTL plant, which
could produce 10 million barrels of distillate per annum. Furthermore,
an integrated gasification combined cycle plant, producing 560 MW of
power, was also incorporated into the pre-feasibility study.
“There
is a great deal of value adding activity to be undertaken throughout
2010 and we are delighted to be able to move forward with vigour after
many years of solid preparation", Lambert said.
The BFS is
expected to take 12-15 months to complete. The next important phase of
work will cover mine design and planning, groundwater engineering, base
line environmental field work and transport and infrastructure options
studies. Once the BFS is completed, the JV expects to be in a position
to ‘take forward not only an internationally significant CTL and power
project but other high-value projects as well’.
In November 2009,
Altona agreed the terms for the JV with CNOOC-NEI. In return for a 51%
interest in Arckaringa Energy's exploration licences, CNOOC-NEI will act
as the project’s operator and it will fund the BFS.
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