Composite Energy Embarks On CO2 Storage Project: Joint-Industry Project to Evaluate C02 Storage in UK Coal Beds

Composite Energy, a Scottish company developing coal bed methane production in the UK and Europe, announced today that it has commissioned a 2 year study to evaluate CO₂ storage in coal-beds. Co-funded by BG Group, Scottish Power and The Royal Bank of Scotland, the £300,000 project will focus on the potential of enhancing methane recovery through storing CO₂ in coal.

Composite Energy is in the process of developing methane (natural gas) production from deep coal-beds in Scotland. As part of the CO₂ study, Composite will provide the horizontal drilling expertise required for the long extended-reach boreholes required for the project. The company currently owns two drilling rigs and employs drilling teams from the Stirling and Falkirk areas.

Strathclyde University in Glasgow will assess the gas adsorption and desorption properties of the coal under the supervision of Professor Peter Hall, and Professor Sevket Durucan of Imperial College, London will assess the mechanical properties of the coal to model and predict the performance of a pilot scheme.

Commenting on the CO₂ storage project, Stephen Jewell Chief Operating Officer of Composite Energy said:

"From the start of our appraisal programme in late 2006, Composite Energy has been forging the development of a coal bed methane industry in the UK. We are delighted to be working alongside BG Group, Scottish Power and The Royal Bank of Scotland to evaluate the potential of CO₂ storage into our activities - not only for increasing methane recovery but also for reducing harmful emissions.

Whereas other CO₂ storage projects store the gas in an underground void or rock-matrix, this project will evaluate the ability of CO₂ to chemically bond to coal. Coal can typically absorb five times more CO2 than the methane it releases indicating that this may be a very real solution for reducing greenhouse gases."

The 2 year programme will focus on evaluating the direct injection of flue-gas into unminable coal seams in the Central Belt of Scotland. A well-bore currently being drilled by Composite at Longannet Power Station will provide coal samples for laboratory analysis.

Keith Lough, CEO of Composite Energy added:

"We have always believed that coal-bed methane trapped in deep coal seams provides an untapped long-term source of indigenous UK gas. With Composite Energy's coal-bed methane appraisal programme and this joint-industry CO₂ storage project, we are hoping to provide new choices for the energy industry in Scotland."

For further information, please contact:

Composite Energy Ltd
Keith Lough, Chief Executive Officer
Stephen Jewell, Chief Operating Officer
+44 (0) 1786 230200

Aquila Financial Ltd
www.aquila-financial.com
Peter Reilly +44 (0) 20 7202 2601

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