Linc Energy has agreed to key commercial terms with GCL Projects Limited (GCL), a subsidiary of Golden Concord Group Limited, to form a joint venture to commercialise UCG to GTL in China.

Construction will commence on the first multi-gasifier project within six months of completion of the suite of formal binding legal agreements. Linc Energy and GCL are working together to finalise the proposed suite of documents so the transaction can be complete by end of June 2012.

Linc Energy will hold 33% of the joint venture and GCL will hold 67%. GCL will provide $15 million in working capital to the joint venture in three equal instalments over the first three years.

The two companies will use the UCG and gas to liquids (GTL) process which Linc has developed over the past five years at its Chinchilla demonstration project in Queensland.