Medicine Bow Fuel & Power LLC, a subsidiary of DKRW Advanced Fuels LLC, announced that it has entered into a long-term contract to sell 100% of the ultra-low-sulfur diesel fuel from its planned coal-to-liquids (CTL) facility in Medicine Bow, Wyoming, to Sinclair Oil Corporation, which will market the fuel in the Rocky Mountain region.
The planned Medicine Bow project (see previous post), which includes a coal mine and adjacent CTL facility, will use an indirect liquefaction process to convert coal resources into refined products that meet critical energy needs while reducing the environmental concerns associated with coal combustion.
The CTL facility will utilize General Electric Company's coal gasification technology to produce synthetic gas. The synthetic gas will be cleaned so that substantially all of the sulfur and carbon dioxide (CO2) is removed. This process significantly reduces greenhouse gas emissions and other environmental impacts associated with the traditional use of coal as a boiler fuel. The syngas will then be liquefied using Fischer- Tropsch technology licensed from Rentech, Inc. (Amex: RTK - News). A further refining process will produce the ultra-low-sulfur diesel product that is expected to exceed current environmental emission standards in the region.
Construction of the CTL facility is scheduled to start in late 2007, with an expected in-service date in the fourth quarter of 2010. In addition to liquid fuels, primarily diesel and naphtha, a number of byproducts of the liquefaction process, including carbon dioxide and chemicals, are expected to be sold for use in the region. Carbon dioxide from the coal can be dried, liquefied and shipped via pipeline, and plans are to sell it to the enhanced oil recovery market in Wyoming with an initial target in the Powder River Basin.
The coal mine is owned by Arch Coal which has a 25-percent stake in DKRW.