Central Petroleum Limited says that a coal field that it discovered in the Simpson Desert could be the biggest in the world.

The coal seam, about 300 kilometres from Alice Springs, stretches for 400 kilomrtres.

The company is not proposing to mine the coal but to gasify it underground and then turn the gas into diesel fuel.

David Shearwood from Allied Resource Partners, which is conducting a feasibilty study into the $7.5 billion poposal says that "We’re not using diesel trucks to move rocks around, we’re not using explosives which give off gases and in the mining process itself you give off methane, we’re not doing any of those things, "We do produce a bit of CO2 in the process itself, we’ll be capturing that CO2 and the bulk of that CO2 will be reinjected back underground."

It is estimated that the coal field could produce up to a billion barrels of diesel a year and have a life of 100 years.