Thursday, March 27, 2014

News: Alkane's plans for Maltby pit

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Alkane Energy plc, one of the UK's fastest growing independent power generators, is applying for planning permission for producing energy at the Maltby Colliery site in Rotherham.

The Nottinghamshire company operates mid-sized "gas to power" electricity plants providing both predictable and fast response capacity to the grid.

£6m in equity funding was raised to complete a £7.5m deal to buy coal mine methane (CMM) assets at Maltby from Hargreaves Services last year. Alkane is set to make a further payment of £2m to acquire additional site infrastructure assets six months after the mine shafts are satisfactorily sealed as part of the planned closure of Maltby Colliery. This is expected to occur by October 2014.

Maltby has reserves of an estimated 11.6 billion cubic feet of coal mine methane, which Alkane is already extracting and using to generate electricity. With eight CHP engines, the site has an existing installed capacity of 11.2MW and when it acquired the site, Alkane said that it hoped to expand CMM operations.

So far, The Maltby operations have been performing ahead of plan, taking Alkane's total group output to 192GWh, up 15% on 2012.

Underground operations ended in March 2013 at the Maltby site that occupies 500 acres and employed over 500 staff and contractors. It is the last coking coal mine left in the UK and produced both high quality coking coal and power station coal.

A decision was made to mothball the mine following no viable alternative solution being found to geological reports that indicated that the risks associated with mining a new panel, called T125, had not significantly reduced and that the panel is not viable on health and safety, geological, and financial grounds.

Now Regent Park Energy Limited, previously called Green Park Energy before it was acquired by Alkane in 2012, is applying to Rotherham Council to "retain gas pipelines, mine gas extraction pump house, containerised generation plant and ancillary equipment, extract mine gas and generate electricity."

The firm is currently contacting nearby landowners and tenants about the plans.

Alkane has more than 800 sq km of acreage under various onshore Petroleum Exploration and Development Licences (PEDLs). Alkane retains a 100% interest in the majority of these PEDLs, which extend to all of the hydrocarbons recoverable from these licence areas. This includes any CMM, natural gas, coal bed methane (CBM) or shale gas. Alkane has the licence for PEDL 43, which covers the Maltby site, but is yet to come forward with plans to extract shale gas by the controversial method of hydraulic fracturing (fracking) and continues to focus on the coal mine methane.

In its preliminary results for the year ended 31 December 2013, Alkane reported that, revenue had grown by 40% to £20.6m compared to the previous year and that adjusted profit before tax increased by 17% to £3.4m.

Neil O'Brien, CEO of Alkane, said: "The UK energy market is facing a number of challenges including the decline of generating capacity with increased risks of power shortages over the coming years. Alkane is well positioned and will continue to develop its business to take advantage of the changing dynamics of the UK power industry."

Alkane website

Images: Alkane Energy

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