March 14, 2013

Ergo Exergy and Sasol Sign General License Agreement for Underground Coal Gasification technology

Ergo Exergy Technologies Inc. (Ergo Exergy) and Sasol of South Africa have concluded a General License Agreement (GLA) for the use of Ergo Exergy’s εUCG™ Underground Coal Gasification (UCG) technology for the evaluation and commercial development of UCG opportunities in South Africa and internationally.

UCG is a coal to gas technology that uses air or oxygen to extract and convert coal in the underground deposits through a series of injection and extraction wells. UCG offers a number of technical and environmental benefits and, in the past, produced commercial quantities of gas for both chemical processes and power generation.

Ergo Exergy is the licensor of the εUCG™ technology to a number of international organisations including public utility Eskom Holdings Ltd (South Africa), state owned mining and energy company Solid Energy New Zealand Ltd (New Zealand) and North American UCG developer Laurus Energy Inc (USA). In the last 12 years, Ergo Exergy’s technology has been applied in several UCG operations worldwide. The latest, the Huntly West UCG field trial in New Zealand developed by Solid Energy, was commissioned in April 2012. The Chinchilla UCG project in Australia produced syngas continuously for over 30 months and is internationally renowned for its clean environmental performance and for generating consistently high quality gas. The Majuba UCG field trial in South Africa developed by Eskom is the longest running and most extensive UCG operation ever conducted outside of the former Soviet Union.

“We are excited about UCG as a technology for Sasol and specifically in the South African environment. UCG has the potential to utilize coal that is not minable through conventional mining technologies,” said Henri Loubser, Managing Director, Sasol New Energy.

“Ergo Exergy is pleased that the distinguished global group of users of our εUCG™ technology is now joined by Sasol, a pre-eminent coal conversion company with proven capabilities in coal mining, syngas production and utilization. We are confident that our joint efforts will meet the highest technical and environmental standards,” said Dr. Michael Blinderman, Director of Ergo Exergy.

Coal is an essential component of the global and South African energy mix, and it is accepted that cleaner coal technologies are required to improve the environmental footprint, lower capital cost, as well as access unminable coal resources. UCG holds the promise of delivering on these requirements. The South African power utility Eskom estimates that UCG could increase recoverable coal reserves in South Africa, adding as much as 45 billion tons to the 34 billion tons currently available.

Sasol and Ergo Exergy will follow a responsible, step-wise approach to evaluate and demonstrate the technology before its commercial application. The companies will ensure that the evaluation is thorough, objective and its results are available to stakeholders for discussion.