Cougar Energy and Direct Invest signed the letter on behalf of CDIC, which is the proposed joint venture entity to be formed in which Cougar Energy will hold 60% stake and the remaining stake will be held by Direct Invest.
QDI is a privately owned company which controls the rights to deposit in the coal rich inner Mongolian province.
The LOI outlines the intended commercial arrangements to develop the UCG project and sell the gas production. It is proposed that an off-take agreement for the gas will be negotiated with an independent power utility company, which will assume the task of funding, building and operating the electricity generation facility.
Dr Len Walker, managing director of Cougar Energy, said: “We are delighted to announce this first planned UCG project in the People’s Republic of China, within six months of signing the MOU with Direct Invest.
“The PRC remains heavily dependent on coal to meet its energy requirements and the Chinese Government recognizes the current environmental challenges it faces and is urging the coal and power industries to focus on clean technologies.”
