Wildhorse Energy, which is focussed on developing underground coal gasification (UCG) and uranium projects in Central Europe, has signed a Memorandum of Understanding (MOU) which sets out the terms for exclusive negotiations and cooperation between the company and Air Liquide, the world leader in gases for industry, health and the environment. Under the terms of the MOU, Air Liquide will evaluate the technical and commercial conditions for installation of a new state-of-the-art air separation unit on WHE’s UCG site in Pécs, Hungary with the capacity to supply all the oxygen needs for WHE’s UCG project in Mecsek Hills, Hungary and shall develop its final proposal for oxygen supply to WHE based upon this evaluation.The MOU outlines preliminary terms for securing the supply of oxygen, a vital gasification feedstock, and represents an important step towards bringing the Mecsek Hills project on streamThe MOU is an integral part of the PFS currently being conducted on the projectAir Liquide will further evaluate how best to supply WHE with gases other than oxygen, such as industrial gaseous nitrogen and compressed airThe two parties will explore further avenues of cooperation with regards the Mecsek Hills UCG project.WHE’s Managing Director Matt Swinney: “This agreement represents a significant milestone in completing our ongoing PFS on the Mecsek Hills UCG Project and in turn towards achieving our target of becoming a leading unconventional energy supplier in Central Europe. We believe that Air Liquide’s decision to undertake an MOU with WHE demonstrates its support to our strategy, ambitions and prospects in the region. With our PFS due for completion during Q1 2012, we are very much looking forward to working closely with Air Liquide, the world leader in its field, as we develop our Mecsek concession towards production.”WHE has coal and coal bed methane exploration licences covering an area of approximately 418 km2 in the Mecsek Coal Formation in the Pécs region of southern Hungary. WHE’s strategy is to unlock the value of the stranded coal deposits through the partial oxidation of the in situ coal to form a mixture of gases (syngas) which can be used for power generation or conversion into liquid fuels.In line with the initial findings of the ongoing PFS, focussed on using UCG technology for a >400 MWt UCG project on the Mecsek Hills UCG Project, WHE will require up to 300 t/d of oxygen during phase 1 of the project. Phase 1 is centred on commercial demonstration where some 130 MWt of syngas will be supplied to a Combined Cycle Gas Turbine to generate about 60 MWe (megawatt electrical) of which around 2 MWe shall be consumed through self-consumption. In line with this, the project will have incremental oxygen needs of up to 600 t/d in the second phase, bringing the total daily oxygen requirement to 900 t/d. The PFS is due for completion during Q1 2012.The MOU follows a period of thorough evaluation conducted by WHE. Air Liquide was selected as a result of offering the most favourable set of solutions to supply the company with oxygen at the site, on both a technical and economic basis. During the term of the MOU, the two parties will explore further avenues of cooperation, regarding the supply of gases for WHE’s UCG project. Under the terms of the MOU, Air Liquide will have exclusive rights to negotiate the design and permitting of a Cryogenic Oxygen plant on WHE’s UCG site in Pécs, Hungary and to build, own, and operate the plant which will produce at least 98% pure oxygen, providing favourable commercial value to both parties. Following completion of the PFS, Air Liquide and WHE will proceed with negotiations.The WHE business model is focussed upon applying UCG technology to convert coal into syngas and then selling the syngas to power stations as a gas feedstock. The development and expansion of the UCG portfolio is underpinned by a potentially world class uranium project which the company is advancing with its Hungarian uranium development partners Mecsek-Öko and Mecsekérc, with the support of the Hungarian Government.The business strategy is to become a major supplier of gas feedstock to power stations in Central Europe. WHE’s project development strategy is based primarily upon acquiring strategic UCG sites in key locations in Central Europe where gas markets are dominated by Russian gas imports, energy security is a major factor for governments and large scale industrial consumers of gas and gas prices are correspondingly high.