London-based fossil-fuel energy firm Cluff Resources has announced plans to extract gas from the Firth of Forth following a major coal find.
AIM-listed Cluff Natural Resources said a report by independent assessors estimated there were up to 335 million tonnes of coal to be mined in the Forth estuary.
Cluff said the find was enough to power millions of homes and it now plans to build the UK’s first deep offshore underground coal gasification (UGC) plant.
Cluff said its assessment had identified two coal seams at its Kincardine UGC licence which had 43 million tonnes of “stranded” coal of sufficient quality for a UGC plant.
The licence covers an area of 37.6 sq km of tidal estuary waters – and includes the ‘Gulf of Gullane’ shale-oil ‘sweetspot’ in East Lothian, which could extend as far south as Dalkeith in Midlothian.
Fears – however much ill-founded – have led to local community groups in East and Mid Lothian rapidly organising ‘anti-fracking’ meetings in church halls and community centres.
Cluff Resources’ chairman and chief executive Algy Cluff said: “The development of UCG around the Kincardine licence area would result in the creation of new jobs, help protect existing industry as well as create significant supply chain benefits.
“The emerging UCG industry has a significant role to play in unlocking the UK’s most abundant indigenous energy resource which, with the imminent closure of the last deep coal mines, is now otherwise effectively beyond reach.”
“We believe that UCG will help provide a cleaner energy, diversity of supply and energy security for the UK, and we look forward to updating the market on our developments at our Kincardine Licence area with respect to this.”
Cluff Resources has gained the following petroleum exploration licences (which include oil, shale and gas rights) across the UK from the Dept. of Energy in London;
Dee Estuary 6,953 hectares
Loughor Estuary 4,207
Kincardine Bay 3,687
Largo Bay 7,796
North Cumbria 8,238
In it latest annual report Cluff said these five licences provide the company with a critical mass in terms of its portfolio of UCG assets and brings the total offshore area available for UCG development to 30,881 hectares.
The five licences are strategically spread between Scotland, (11,483 hectares), Wales (4,207 hectares) and England (15,191) hectares.
Cluff Resources – led by veteran N. Sea oil explorer Algy Cluff – is now firmly focused on developing the licence areas for UCG.
It is assembling a team of specialists – including Andrew Nunn, former exploration manager at Dart Energy which is applying to mine coal-bed methane in the Stirling/Falkirk coal field around Airth – to identify the most suitable sites for the first UCG project, with a view to ultimately making the confirmatory test and exploration drill holes. And Graham Swindells – appointed as Cluff finance director at the latest annual meeting – qualified as a chartered accountant in Scotland.
Geological mapping of the Cluff sites in the Forth estuary is now underway, environmental requirements are being assessed, and industrial customers for the gas – potentially including the Ineos’ operated petro-chem refinery at nearby Grangemouth – are being identified.
Cluff’s economic models have also shown that gas at highly competitive prices can be supplied to industry around the UCG production wellheads, and the business model being actively pursued is that of an alternative gas supplier.
Algy Cluff added: “Our UCG licences already granted have been chosen for their well-known coal attributes and, equally importantly, for their location in close proximity to industrial activity with large energy demand.
“Our two Firth of Forth licences are particularly important in this respect and we are also attracted by the Cumbrian coastline, also known as Britain’s “Energy Coast”, where our licenced inshore coal is situated alongside the industrial areas of Workington and Whitehaven.
“UCG in these inshore coal areas offer the UK the potential of a secure and long lasting source of gas for industrial and power generation use, which on all the third party estimates reviewed to date, will be cheaper than imported natural gas.
“The exploration risks are deemed small, because the coal is already well explored – and deep UCG (more than 600 metres), which we plan to do inshore – is extremely unlikely to contaminate water supplies.
“UCG, which involves partially burning large seams of coal underground to produce a mixture known as syngas, could bring much-needed energy security to the UK as gas from conventional sources dwindles.
“This is the continuation of North Sea development by other means. It’s the North Sea mark two.”
Analysts at Panmure Gordon said: “UCG could potentially unlock huge, untapped and indigenous coal resources, helping to secure the country’s energy supply for many years against a current backdrop of increasing reliance on imported gas.”
Algy Cluff, has extensive experience and contacts obtained during 40 years’ of successful investing in the natural resource sector. In 1975, Algy was involved in the discovery of the Buchan oil field, the 14th discovery made in the UK North Sea. In the same way, Cluff Natural Resources is now aiming to become a pioneer in the unlocking of stranded coal in the UK.
Cluff Resources currently has 100% working interest in eight Deep Underground Coal Gasification (‘UCG’) Licences in the UK covering a total of 61,274 hectares of Carmarthenshire and the Dee Estuary, the North Wales/Merseyside border, the Firth of Forth near Kincardine, Scotland, North Cumbria, Largo Bay, Durham North, Durham South and Maryport.