LINC ENERGY LTD // 2009 ANNUAL REPORT

02 MANAGING
DIRECTOR’S
REPORT
CONTINUED
Concept design for
20,000 bpd GTL facility
We have appointed Aker Solutions (formerly known as
Aker Kvaerner) to jointly develop the conceptual design
of Linc Energy’s proposed 20,000 barrels per day (bpd)
commercial GTL facility that is planned to be based in
South Australia. Aker Solutions through its subsidiaries
and affiliates, is a leading global provider of engineering
and construction services, technology products and
integrated solutions, with operations in 30 countries.
As a result of concluding this agreement, Aker Solutions
will bring its global resources and process engineering
capability together with Linc Energy’s own technology,
know-how and people to form a strong relationship capable
of further refining and improving Linc Energy’s GTL
technology in order to accelerate its commercialisation.
This conceptual design phase has a schedule of six months
and has already commenced with a target completion
of mid-February 2010. At the completion of the work,
Linc Energy will have data outlining likely operating and
capital costs such that it can further validate the expected
shareholder value that this first plant can realise.
The appointment of Aker Solutions is further recognition
of Linc Energy’s significant progress upon its vision and
technical development. This engineering agreement with
Aker Solutions is an important step in the Company’s
progression towards commercialisation. The outcome
of this work will lay the foundations on which the
execution of the commercial project will be based.
Our experience
Linc Energy is the world leader in UCG technology
development, with 10 years of experience in Australia
and as the owner of the only commercial scale UCG
operation in the world at Yerostigaz in Uzbekistan.
Linc Energy also has a UCG technology team that is
second to none in both the number and quality of UCG
technical specialists with experience and track records
of accomplishments with UCG.
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We are already the first to commercially produce power
via UCG at our Yerostigaz operation, and with a focus upon
gas turbine power generation, in particular combined cycle
gas turbine for power generation, Linc Energy is aiming to
position itself as the leader in the field of cost-efficient UCG
to Power and commercialise this advantage in quite a large
way over the coming months. Again, watch this space!
In addition, we are the only company in the world
that has successfully developed a UCG to GTL
demonstration facility.
Linc Energy will continue to grow with even more people
being added to our technical teams in the months to
come. Linc Energy is aiming to expand its influence and
accomplishments, via the opening of offices in the USA,
Vietnam and larger offices in South Australia.
Our strategic locations
South Australia (SAPEX)
With the completion of the acquisition of SAPEX Limited
in October 2008, Linc Energy’s efforts in South Australia
have bolstered its domestic position for commercial UCG
operations. Exploration drilling is well under way in the
Arckaringa and Walloway Basins to identify suitable
coal for our commercial UCG operations.
United States
Globally, Linc Energy has aggressively pursued a strategy
to participate in the emerging clean coal energy sector in
the USA, paving the way for UCG to GTL in North America.
The recent acquisition of 92,059 acres of coal lease
areas in the Powder River Basin in Wyoming is our first
step to achieve this goal. We now hold a 100 per cent
interest in these leases and intend to shortly commence
the necessary site selection work, permit and approval
processes required in order to obtain a commercial
UCG operational permit.
Prior to the end of 2009, Linc Energy intends to open
a US head office in Denver, Colorado and a project office
in Casper, Wyoming to support its UCG operations within
Wyoming, and assist in capitalising upon additional
opportunities in North America.
I would like to acknowledge the great support that
Linc Energy received throughout the acquisition process.
Our colleagues at GasTech, President John Wold, and
the Governor of Wyoming, Dave Freudenthal, were on
hand to welcome Linc Energy with significant praise of our
achievements and what Linc Energy brings to Wyoming.
Vietnam
Also, earlier this year we completed negotiations and
signed contracts with our partners in Vietnam, VINACOMIN
and Marubeni. The main aim of the Tonkin project is to
deliver power to over six million households in Vietnam
using Linc Energy’s UCG technology. Stage 1 of the project
will involve the development and operation of a trial
UCG field in the Red River Delta region of Vietnam.
The finalisation of these contracts is a major step for
Linc Energy towards its goal of bringing power generation
fuelled by competitively priced UCG synthesis gas to
countries like Vietnam that have significant increasing
demands for power supply. Our work in Vietnam will
further demonstrate the potential for UCG to be the
next major energy source for the world.
It is exciting to be part of a solution that can positively
impact millions of lives. What we are planning to do in
Vietnam is a demonstration of what Linc Energy can
achieve and how we can potentially help the global
community. We look forward to bringing this project to
commercialisation and continuing our strong working
relationships with our Vietnamese and Japanese partners.
Yerostigaz
Operations in Linc Energy controlled Yerostigaz in
Uzbekistan continue, with positive results being achieved
for the supply of syngas to nearby Angren Power Station.
The government has been particularly pleased with the
quality of the gas supply with Yerostigaz being identified
as one of the country’s best performing energy companies.
Yerostigaz continues to be a huge source of technical
competitive advantage for UCG development for Linc Energy.
Over the coming twelve months some modest improvements
will be made to Yerostigaz’s air compressor operations with
new western style air compressors being purchased and
installed at the site. This will further improve the reliability
and energy efficiency of UCG gas production into
the future, adding to the site’s profitability.
A committed and expert team
The past financial year has seen Linc Energy’s technical
teams grow both in experience and in employee numbers.
Linc Energy is a unique organisation, with specialist
recruitment requirements, which has attracted employees
from all over the world including South Africa, Russia, the
United States and Australia, to name just a few. Linc Energy
staff are indeed an asset and it is their commitment to the
vision of providing cleaner energy solutions that will help
Linc Energy to realise UCG to GTL success.
It is this strong team that has allowed Linc Energy to
deliver on our objectives this year. I am very proud of the
achievements of this outstanding team. We have a strong,
versatile, disciplined, highly trained and experienced team
and it is one of our key strategies to continue to build
this team and to expand it that sets us apart from our
competitors and places Linc Energy firmly at the front of
UCG development and operations. As an example of this,
I am extremely proud of the fact that over the past four
years we have developed the world’s largest and most
relevant UCG technical library in the world; an asset unique
to Linc Energy and its technical team.
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