DKRW Plans 2012 Construction Start for Wyo. Coal Liquefaction Project
DKRW Advanced Fuels LLC’s coal-fueled industrial gasification and liquefaction facility to be built near Medicine Bow, Wyo., took a big step forward Dec. 1 when the company announced it had secured a contract to sell 100% of the proposed plant’s gasoline production.
DKRW said its wholly owned Medicine Bow Fuel & Power LLC subsidiary has entered into a contract under which Vitol Inc. would purchase all of the gasoline produced by the coal liquefaction plant. The contract is one of the first major commercial agreements in the U.S. for the sale of liquid transport fuels made from coal, DKRW said.
The supply deal with Vitol should enable DKRW to ramp up construction of the liquefaction plant in 2012. The company said it is completing final development and financing activities for the project
“We believe all forms of energy will be needed to meet the requirements of the American economy and ensure our national security,” said DKRW Executive Chairman Robert Kelly. “The United States has more than sufficient coal reserves to meet increasing requirements for liquid transport fuels while substantially reducing American imports of crude oil. All of this can be done while at the same time producing a well-to-wheels CO2 footprint competitive with gasoline derived from traditional petroleum refining.”
The DKRW facility at Medicine Bow has been in the works for years. The company secured a similar supply deal in 2007 with Sinclair Oil Corp., but the project was delayed.
As proposed, the Medicine Bow plant is designed to produce 10,600 barrels of regular gasoline per day in each gasification train, with sufficient coal reserves for four trains. DKRW has 180 million tons of on-site coal reserves. With a planned conversion rate of one ton of coal to two barrels of gasoline, the project has reserves of 360 million barrels of oil equivalent.
The project would work a longwall-capable coal reserve in the Carbon Basin obtained from, and to be operated by, Arch Coal Inc. The Saddleback Hills longwall mine would be next to Arch’s existing Elk Mountain strip mine.
DKRW said in a Dec. 1 news release that it plans to capture and sequester CO2 from the Medicine Bow plant for use in enhanced oil recovery. The company has already entered into an off-take agreement for the CO2 with a unit of Denbury Resources Inc.
DKRW describes Medicine Bow as its initial project, saying it is also pursuing projects in other parts of the U.S. and exploring international opportunities for coal liquefaction.
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