Carbon Energy Limited Stock Market Press Releases and Company Profile

Brisbane, Jan 20, 2009 AEST (ABN Newswire) - The production of commercially viable syngas has been confirmed at Carbon Energy's (ASX:CNX) Underground Coal Gasification (UCG) plant in southeast Queensland, the company announced today.

This announcement confirms during the Plant's first week of operation on steam and oxygen injection, results have met and, in some cases, exceeded Carbon Energy's production parameters for gas quality and quantity.

Carbon Energy's Managing Director Andrew Dash said: "The trial's preliminary results validate the assumptions of our proprietary model for conversion of coal to syngas, being that for each tonne of coal gasified converts to 20GJ of gas energy, and pre-feasibility numbers for capital and operating cost calculations for a production plant are valid."

A series of tests have confirmed that the plant's single panel commercial design has now achieved the following targets:

- Flow rate in excess of 1 PJ per annum has been achieved consistently and predictably

- Average energy yield equals 20 GJ per tonne of coal gasified

- Coal gasification rate of 150 tonnes per day achieved

- Average energy value of the raw gas exceeding 12 MJ/m3

- Oxygen use efficiency meeting or exceeding targets

- Hydrogen production meeting targets

- Methane production exceeding targets

- Predictable and stable responses to changes in input conditions such as steam/oxygen injection rates, pressure and flow rate changes

Total production from the first seven days of the oxygen and steam trial at the Bloodwood Creek site:

- 800+ tonnes of coal gasified

- 16, 000+ GJ of gas energy

- Exceeded the 2:1 Hydrogen to Carbon Monoxide ratio needed for liquid fuels, ammonia and methanol production.

Overall Carbon Energy's UCG trial has achieved the following:

- Demonstration of sustained production of air injected syngas suitable for low cost generation of power (achieved in November 2008)

- Demonstration of production of high value oxygen injected syngas suitable for the production of low emission electricity, chemicals and liquid fuels

- The conversion of unmineable coal in situ to gas energy at an average rate of 20PJ per million tonnes in the Surat basin

- Validation of Carbon Energy's proprietary design and economic models which can be applied to any suitable coal seam anywhere in the world

Over the coming months Carbon Energy will be completing the trial , further analysing the results and continuing pre-feasibility studies for power generation, ammonia, and methanol production.

About Carbon Energy Limited

Carbon Energy Limited ASX CNXCarbon Energy (ASX:CNX) (OTCMKTS:CNXAY) is building a gas business, utilising its unique keyseam technology.
 
The Company is committed to providing industrial gas users with an affordable and secure source of high quality feedstock, as gas prices remain strong, through increased demand across our key markets.
 
Carbon Energy is the only company to complete a full-lifecycle, commercial scalable underground gasification trial. The Company's keyseam technology has successfully accomplished all the recommendations outlined by the Queensland government's Independent Scientific Panel (ISP) which included intense, independent environmental scrutiny.

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Contact

Andrew Dash, Managing Director
Carbon Energy
TEL: +61-7-3337-9901
MOB: +61-419-025-507



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