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Leigh Creek in China HoA

Australian company also in talks to trade gas on the Shanghai International Energy Exchange

Australia-listed Leigh Creek Energy has signed a heads of agreement with its largest shareholder which will see it help develop underground coal gasification in China.

Leigh Creek confirmed Tuesday it had signed the agreement with China New Energy which establishes the process to develop a full commercial agreement which will lead to the formation of a joint venture company.

A major focus of the joint venture will be the production of hydrogen and fertiliser using UCG methods.

CNE holds stakes in large underground coal resources in China’s Shanxi Province and it hopes to commence a UCG project with Leigh Creek before the end of the year.

Leigh Creek said the agreement with CNE came about following its successful pre-commercial demonstration in South Australia which saw it successfully produce gas and book 1153 petajoules of proven plus probable reserves.

The company also revealed Tuesday it was in formal discussions the Shanghai International Energy Exchange to directly trade its gas on the exchange

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