Carbon Energy Limited (ASX:CNX) To Commence Commissioning Of UCG Panel 2

Sydney, Mar 17, 2011 (ABN Newswire) - Carbon Energy Limited CNX CNXAF is pleased to advise that commissioning of its Underground Coal gasification (UCG) Panel 2 will commence in the week beginning 21 March 2011. Work on the installation of the additional groundwater water monitoring wells at its Bloodwood Creek site in Queensland is progressing well with an expectation of completion this Friday 18th March. The additional groundwater monitoring wells have been installed following the Company's operational site review, discussions with Queensland Government Department of Environment and Resource Management (DERM) and the amended environmental conditions received from DERM in early February 2011. During a five week period (ending Friday 18th March) Carbon Energy will have installed additional groundwater monitoring wells which will be incorporated into the Company's existing extensive network of thirty wells which are located within the one square kilometre that makes up the Bloodwood Creek site. Carbon Energy remains committed to the continuous improvement of its UCG technology and its environmental performance and monitoring programs. Andrew Dash, Managing Director of Carbon Energy said, "Over recent weeks, Queensland has once again experienced substantial rainfall; nonetheless Management, site staff and our drilling contractor have worked hard to keep the current work program on track. I am pleased to report that at this stage, weather permitting, all the new monitoring wells will be in place by the end of this week enabling Carbon Energy to progress with the commissioning program for our new UCG Panel 2." Mr Dash commented further that, "This is a particularly exciting time for Carbon Energy's Queensland project because following the commissioning of Panel 2, the syngas produced will enable us to start the commissioning process for the gas engines at our 5MW Power Station. This will allow Carbon Energy to undertake its first steps towards generating electricity from UCG syngas" Further project updates will be provided over the coming months as key milestones are achieved. About Carbon Energy Limited Carbon Energy's purpose is to produce clean energy and chemicals feedstock from Underground Coal Gasification (UCG) syngas. Carbon Energy's unique approach to UCG and syngas production produces a low cost option for capturing CO2 making it a leader in clean coal technology. Carbon Energy's ambition is for syngas to become the preferred feedstock for producing clean coal power stations, an alternative to oil-based fuel, agribusiness products (fertilisers and explosives), polyolefin products (such as plastics) and allowing for economic carbon capture. Carbon Energy's technological advantage comes from its association with CSIRO including world class geotechnical, hydrological and gasification modelling capabilities. Carbon Energy is building an international portfolio of coal assets, suitable for UCG with close proximity to markets.