China National Offshore Oil Corp., that country’s largest offshore oil explorer, and Altona Energy Plc approved a A$40 million ($39 million) program to evaluate a coal-to-liquids project in South Australia.
Units of the two companies are due to start the feasibility study into the Arckaringa venture in the fourth quarter of this year, Altona said in a statement today. The first stage is likely to last 12 months. London-based Altona estimates it has a 7.8 billion metric ton coal resource at the Arckaringa Basin, about 800 kilometers (500 miles) north west of Adelaide.
The joint venture is moving from a “conceptual and planning phase” into “detailed evaluation and execution,” Altona Chairman Chris Lambert said in the e-mailed statement.
Altona aims to convert its coal into transport fuels that produce lower emissions than conventional fuels as Australia seeks to tackle climate change, the company’s website shows.
State-owned China National Offshore is the parent of Hong Kong-listed Cnooc Ltd., China’s third-largest oil producer.