Cougar Energy has signed a memorandum of understanding (MoU) with Eneabba Gas for establishment of a joint venture (JV) to develop an underground coal gasification (UCG) project together with an adjoining power station utility in the Mid West of Western Australia.

The formation of the JV is subject to the finalization of the terms sheet and execution of the JV agreement( JVA). The MOU specifies that this is to occur within 60 days.

Upon signing of the JVA, Cougar Energy will be entitled to 50% of the Sargon Tenement (E70/2758) owned by Eneabba Gas subsidiary Eneabba Mining.

Through the formal JVA, Cougar Energy and Eneabba Gas intend, from the middle of this year, to conduct further exploration drilling, test work and studies to scope the size of the potential UCG project.

Cougar Energy said that it has been investigating for various opportunities to expand its present portfolio of sites and particularly to establish its UCG activities in Western Australia.

Len Walker, managing director of Cougar Energy, said: “The Sargon Tenement coal resource near Dongara in Western Australia exhibits good potential for a long-life UCG project. It satisfies all of our preliminary due diligence enquiries. The technology and know-how of our UCG partner Ergo Exergy Technologies is very well suited to exploit this resource.”