DKRW to Acquire Coal Reserves for Coal-to-Liquids Facility

10 March 2005

Houston-based DKRW Energy has signed an option agreement with Arch Coal to acquire undeveloped coal reserves in the Carbon Basin of Carbon County, Wyoming to provide the feedstock for a integrated power and coal-to-liquids (CTL) facility to be located near Medicine Bow, Wyoming.

DKRW announced plans for the $2.75B facility last year, and plans to have it online between 2008 and 2010.

The acquisition of the coal is a major step. DKRW plans the facility to be located by the coal field, reducing or eliminating the need for rail transport of the mineral. The company estimates using 6 million tons of coal per year in the plant.

The integrated gasification facility (which seems like it will be an advanced IGCC (coal-based Integrated Gasification Combined Cycle)-style plant) will create a synthesis gas from the coal.

A conceptual drawing of an IGCC system (from the Gasification Technologies Council is to the right.

Some of this syngas will flow to a Fischer-Tropsch liquefaction system to produce 33,000 barrels per day of synthetic diesel and naptha. The rest of the gas will support a 350 MW power generation system.

Over the next few months, DKRW will be selecting its technology providers for the coal gasification and Fischer-Tropsch liquefaction technologies, as well as selection of electric power generation and transmission equipment, EPC contractors, and the securing of financing.

DKRW was formed in January 2002 by four principals (Doyle, Kelly, Ramm, White), three of whom had been executives at Enron (which spectacularly filed for bankruptcy in December 2001).