The United States first private coal-to-liquids project moved one step further ahead with the announcement on August 14 by Medicine Bow Fuel & Power LLC (MBF&P), a wholly owned subsidiary of DKRW Advanced Fuels LLC (DKRW), SNC-Lavalin GDS Inc., and SNC-Lavalin Constructors Inc. that they have formed an alliance to develop, design and construct a number of coal-to-liquids fuel projects that are valued in excess of a billion dollars.
MBF&P has awarded SNC-Lavalin GDS Inc. and SNC-Lavalin Constructors a contract to execute the feasibility study and to be its engineer and EPC contractor for the future FEED and turnkey portions of the Medicine Bow, Wyoming coal-to-liquids facility project commencing in the 4th Quarter 2006.
This selection now enables us to move forward with the design and permitting of the facility said Robert Kelly, Executive Officer of DKRW and MBF&P. DKRW had previously announced that construction was to begin in 2006, with initial operations to begin in the 2008-2010 timeframe.
The Project will transport diesel and other fuels via pipeline to major energy companies in the region. During the initial phase, it is anticipated that power (45 MW) not utilized in the CTL project will be sold to regional electricity providers. Carbon dioxide will be stripped, sold via pipeline and sequestered in regional enhanced oil recovery operations. Sulfur will be removed from the process, solidified, and sold into the agricultural market. The Medicine Bow project’s power will be produced in gas turbines in combined cycle mode from the synthetic gas and by steam turbines using the steam generated by the gasification and the FT processes. The end result is that the Project's power is produced with very low carbon dioxide and SOx emissions.
In previous announcements, MBF&P announced it has selected GE (NYSE:GE) to provide its coal gasification technology and Rentech, Inc. (AMEX:RTK) to provide their proprietary Fischer-Tropsch technology for the project that will initially make about 11,000 bbl/day of transport diesel and other fuels using high Btu, low sulfur coal of the Carbon Basin Coal Reserve from a mine being developed and operated by Arch Coal (NYSE:ACI). Diesel and other transport fuels will be sold to regional customers and the power, carbon dioxide and other products will be sold from the Project.
DKRW Advanced Fuels LLC, a wholly owned subsidiary of DKRW Energy LLC, is engaged in developing, managing, and owning projects that utilize coal gasification technology, utilizing coal-to-liquids, methanation and integrated coal gasification combined cycle (IGCC) technologies. The Medicine Bow Project employs coal gasification, coal-to-liquids and IGCC technologies.
SNC-Lavalin (TSX: SNC) is one of the leading groups of engineering and construction companies in the world, a global leader in the ownership of infrastructure, and in operations and maintenance services.