Australian oil and gas company Linc Energy has signed a memorandum of understanding (MOU) with Tanzania to develop a 400MW coal gasification to power plant in the East African country.

Signed between Linc Energy, the National Development Corporation (NDC) of Tanzania and Olympic Exploration, an oil and gas drilling company from Texas, the MOU specifies a programme of coal exploration and power plant development, which would see the commercialisation of a 400MW power plant in the south west of Tanzania in late 2017.

The NDC has agreed to work with Linc Energy and Olympic Exploration to obtain all necessary permits and approvals for the project, while also assisting with the securing of land access, utilities and the development of a long-term Power Purchase Agreement (PPA).

Joint venture project

Olympic Exploration has access to large coal resources in Tanzania and will be working with Linc Energy on all of the necessary exploration, feasibility studies, finance raising, project engineering, delivery and operation on behalf of a future joint venture between the parties.

Commenting on the first coal gasification to power project in Tanzania, Peter Bond, CEO and managing director of Linc Energy, said it will cement the country as a regional leader in the adoption of clean coal technologies and power generation.

Mr Bond said: “This MOU reconfirms the potential for underground coal gasification to play an increasingly important role in the energy mix of southern Africa. We are delighted to be partnering with the Tanzanian Government and Olympic Exploration in this exciting project which not only acts as a further catalyst for the commercialisation of UCG in Africa, but also affords significant economic and regional benefits to the people of Tanzania.”