Linc Energy Ltd. (LNC.AX) has signed letter of intent with Xinwen Mining Group to develop underground coal gasification or UCG and Gas to liquids in China. Linc specified that this deal covered Yinan and Yibei coalfields and had reported 15.37 billion tonnes of coal and exploration target of another 14.87 billion tonnes through further drilling.
Under letter of intent, the companies have agreed to negotiate terms of formal deal to form joint stock company for to develop UCG fields to produce gas for transport directly to Shanghai. It is expected that all negotiations and the establishment of the joint stock company will be finalised by the end of 2008.
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