Anglo signs Shell to Latrobe brown coal project - Business - Business


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PROSPECTS for the vast brown coal resources in Victoria's Latrobe Valley to host a $5 billion synthetic diesel and electricity project have soared.
Anglo-Dutch oil major Shell has thrown its money and technology behind the project, the Monash energy project near Traralgon, in a global alliance with the project promoter, South Africa's Anglo American.
Shell and Anglo have formed the alliance to pursue "clean" coal conversion energy opportunities and have nominated the Monash project as their leading candidate.
Formation of the alliance comes ahead of an expected mid-year decision to first build a $300 million to $400 million demonstration unit for the Monash project, one that is promoted as being clean because carbon dioxide emissions are to be captured for injection into exhausted Bass Strait gas reservoirs.
The demonstration plant would help to commercialise technology that would produce low-emissions diesel and electricity from brown coal, with Anglo holding a brown coal exploration licence that sits next to the conventional Loy Yang power station and that straddles the Hyland Highway, 200 kilometres east of Melbourne.
If the process proves viable, a $5 billion energy complex could be built within a decade. Its diesel and other liquids production of more than 60,000 barrels a day would be bigger than the fast-falling liquids production from the ExxonMobil/BHP Billiton Bass Strait oil and gasfields of 50,000 barrels a day.
The Monash project initially envisages a new coal mine, drying and gasification plant, carbon dioxide capture and storage and a gas-to-liquids plant.
The global alliance was announced in London. Its aim is to "utilise the extensive coal reserves of Anglo American and combine its mining capabilities with Shell's leading-edge technologies".
"The objective is to extract, gasify and then convert coal into chemicals, hydrogen, power, liquid hydrocarbons and other uses," the companies said.
"Burning the synthesis gas generated by the gasification of coal emits significantly lower quantities of greenhouse gases and pollutants than traditional coal burning and is the cleanest way to harness the energy potential of coal, the world's dominant fuel source," they said.
Anglo muscled into the Latrobe Valley in 2004 when it took control of the Monash project by spending $52 million to buy the 80 per cent of Australian Power & Energy, the original project promoter, it did not already own. That followed its initial acquisition of a 20 per cent interest in April 2003.
Geosequestration is being banked on by the coal industry to reduce greenhouse gas emissions