PERTH (miningweekly.com) – Diversified energy group Linc Energy on Tuesday announced that it would move its underground coal gasification (UCG) operations from Australia, and that it is likely to focus on Asia.

Linc said that it would decommission its Gasifier 5 (G5) demonstration facility in Chinchilla, in Queensland, after two continuous years of operation. The completion of the G5 project marked the end of nearly 14 years of operational trials and technology research at the Chinchilla facility.

The G5 project, which started in 2011, incorporated the engineering design to be employed at Linc’s future commercial UCG projects internationally, and had achieved several key milestones over its operational life.

Linc stated that despite UCG being first initiated by the Queensland government as a technology for prospective monetisation of the state’s stranded coal reserves, the state government had not provided the UCG industry with any material certainty or confidence capable of supporting commercial investment in the industry.

“As a result, Linc Energy does not see a commercial opportunity to deploy its UCG technology into Queensland at this time,” Linc told shareholders.

The Queensland government was considering the potential for a commercial UCG industry, with an Independent Scientific Panel in July pointing out that the state was leading the world in development of UCG technology.

While praising Linc and fellow energy firm Carbon Energy for their current work, the report also proposed a planning and action process be established to demonstrate successful decommissioning of the underground activities associated with UCG, and recommended that until the decommissioning could be demonstrated, no commercial UCG facility should be approved.

Linc CEO Peter Bond said that while it wished to maintain a presence in the state, in the hope that future clarity and leadership would provide the necessary trigger for commercial investment, Linc had drawn the conclusion that it had to continue to progress its UCG business offshore to ensure the future deployment of the technology into regions such as Asia, which was seeking long-term energy security and cost independence from rising natural gas prices.

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

“Obviously 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 UCG at Chinchilla.”

Bond noted that given the opportunity, Linc would likely stay in Chinchilla and use the site as its research and development operation to support global projects.

“However, due to the regulatory uncertainty in Queensland over the last several years in particular, I do not believe that the developing UCG industry has been treated reasonably. 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.”

Linc’s energy division was now deploying its technology into Asia, Africa, Russia and Poland.

Linc has also moved to delist from the ASX, and was seeking regulatory and securities exchange permission to relist on the main board of the Singapore Exchange.