DART Energy has produced the first electricity from natural gas recovered from within coal seams in Scotland.
The Australian company is working on the coal bed methane (CBM) project on a 329 square kilometre site near Airth in Stirlingshire.
The first phase is generating electricity from two pilot wells, although the generator has a restriction of 100,000 standard cubic feet (scf) of gas per day.
Dart, which has its European headquarters in Stirling, predicts daily peak production rates of more than a million scf from each well.
A sales deal with SSE is due to start in April next year which covers the annual delivery of around 11 billion cubic feet of gas for up to eight years.
Work on the second phase will include building surface infrastructure, including compression facilities and pipeline connections.
The UK Department of Energy and Climate Change has already given the go-ahead for development consent with approval of updated technical plans expected in the third quarter of 2012.
John McGoldrick, Dart chief executive, said: "The first electricity generation is quite a major achievement.
"It represents the company's first commercial sales, and continues the progression of our Airth Project towards full development and substantial revenue generation.
"It is the first coal bed methane project in the UK and we are looking forward to expanding the whole operation there.
"It is really our flagship project and we are very excited we have got it on stream.
"We are building capacity and hope to have gas compression in place by next summer."
Dart expects to spend more than £50 million developing the project over the next 18 months, with the funding coming from a debt facility with HSBC.
It is estimated the first and second phase will utilise less than 20% of the available resources at Airth.
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