Danbury, Conn.-based Praxair (NYSE: PX), a combustion technologies copmany, said it's Praxair Deutschland unit has signed an agreement with Sweden's Vattenfall for the joint development of a clean coal project.

Vattenfall, the Nordic region's largest power utility group, is owned by the Swedish government.

Praxair said the project involves a possible 500 megawatt combined heat and power plant in Germany that will incorporate the company's oxy-coal technology. The company said its oxy-coal system will enable the capture of more than 90 percent of the carbon dioxide generated by coal-fired boilers.

"Projects such as this are fundamental to advancing the technology and know-how necessary to reduce greenhouse gases," said Chuck McConnell, VP for oxy-coal technology and gasification at Praxair.

"Working with innovative partners around the world, Praxair is advancing carbon-capture technology to help reduce the environmental footprint of coal, one of the world's most abundant fuel sources."

Praxair said its project with Vattenfall will require approximately 8,000 tons of oxygen per day. The company will develop the conceptual design, cost and performance estimates for the oxygen production facilities as well as for the carbon dioxide processing unit. The captured carbon dioxide is expected to be transported by pipeline to a sequestration site or enhanced oil recovery field.

Praxair said this is its third clean coal project. The company is working on demonstration projects in Jamestown, N.Y., and in El Bierzo, Spain.