CNOOC Signs Agreement With Altona (LON: ANR) for Coal to Liquids Project

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Did you see that China’s CNOOC is getting involved a $3 billion coal-to-liquids (CTL) project in South Australia? Tiny little Altona Resources Plc (LON: ANR), listed on London’s small cap market, has signed what it calls an ‘in-principle agreement’ with CNOOC Energy Investment Co Ltd to cooperate in the development of a project Altona has in the Ackaringa Basin of SA.

It’s an ambitious project too. The project includes a 10 million barrel per year (30kbpd) open cut mine and a 560 megawatt power plant. Altona Chairman Chris Lambert told investors the project could provide both base-load power to SA and diesel fuel. He says SA has, “a significant looming power deficiency and currently imports all of its distillate requirements.”

Nuclear, geothermal, coal, solar-thermal…what’s it going to be Australia? The energy to run Australian industry has to come from somewhere. And that somewhere is going to be influenced by whatever the price of carbon ends up being once the government gets its scheme in place.

Meanwhile, perhaps following Worley Parson’s (ASX:WOR) lead from last week, West Australian Premier Alan Carpenter said, “Us too!!” yesterday in announcing plans for an electric power grid in the Pilbara. The plan calls for 6,000 megawatts of capacity to be installed by 2015. It would replace the current on-site and private system whereby mining firms provide their own energy from diesel generators or dis-integrated power plants.

Just a reminder that we’ll be out in Geraldton next week-unless we are disinvited-to take a look at things and give a keynote address at the Midwest Resources Forum. We’ll let you know what we find out.

Dan Denning
The Daily Reckoning Australia

Dan Denning
Dan Denning examines the geopolitical and economic events that can affect your investments domestically. He raises the questions you need to answer, in order to survive financially in these turbulent times.
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