News

June 29, 2009

Access To A Green Electricity Tariff Could Be Crucial To European Gas Ltd’s Production Plans At Its Gaznonor Project In France

By Amy McLellan

European Gas Limited (EGL) may be about to undergo another transformation. In 2005 the ASX-listed firm, then trading as Kimberley Oil, was a failed explorer in Australia’s remote Canning Basin. The following year it sold its Canning Basin E&P assets to focus on its coal bed methane (CBM) and coal mine methane (CMM) properties in France and Italy, a move that was duly reflected in a name change. In 2007, the ASX firm then got busy proving its credentials as a viable European-based CBM business, successfully coring its huge Lorraine CBM project in eastern France and paying €26 million for a former state-owned CMM business, Gazonor, in northern France.

The Gazonor deal was transformational for the company, bringing some immediate production on to the books and providing the company with a credible track record as a European gas supplier. Now the company is planning to build on this, by moving into the electricity generation business. Gazonor’s CMM production of around 2.6 billion cubic feet per year generates a modest income, about €1million a month, from three production sites - Avion, Divion and Desiree – spread across a project that...