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DKRW Advanced Fuels signs major off-take contract for 100% of coal-derived gasoline from Medicine Bow project

1 December 2011

DKRW Advanced Fuels LLC subsidiary Medicine Bow Fuel & Power LLC (MBFP), has entered into a contract with Vitol Inc., whereby Vitol would purchase 100% of the gasoline produced from MBFP’s industrial gasification and liquefaction facility located near Medicine Bow, Wyoming. (Earlier post.) The contract is one of the first major commercial agreements in the US for the sale of liquid transport fuels made from coal.

The Medicine Bow project will use Carbon Basin coal optioned from DKRW partner (and coal mine operator) Arch Coal to produce refined hydrocarbon liquid products. Initial commercial operation of up to a 20,000–22,000 barrels per day project is expected to start in 2014.

The coal to liquids (CTL) facility will utilize GE coal gasification technology to produce syngas, which will be cleaned to remove substantially all of the sulfur and carbon dioxide. The cleaned syngas is conditioned, modified and converted to methanol, which is then converted to gasoline via the licensed ExxonMobil Research and Engineering methanol-to-gasoline (MTG) process.

Other key elements include Selexol acid gas removal and Davy Process Technology (methanol synthesis).

MBFP says it plans to sequester the CO2 that is captured from the facility by selling the CO2 for enhanced oil recovery (EOR). MBFP earlier this year entered into a contract with a subsidiary of Denbury Resources Inc. to purchase the CO2 for use in their EOR operations. EOR has been used for years in Wyoming, West Texas and the US Gulf Coast to increase oil production from depleted oil and gas fields.

DKRW Advanced Fuels is completing final development on the project and expects to complete financing activities and ramp up construction on the facility in 2012.

We have received front end engineering and design (FEED) work and are finalizing the overall construction and procurement plan for the project. The project is also in the process of securing a financing package from private and public sources, including the possible use of certain bond programs available for industrial development in the State of Wyoming.

—Robert Kelly, Executive Chairman of DKRW

December 1, 2011 in Brief | Permalink | Comments (4) | TrackBack (0)

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Comments

This may become one of the best interim solution for USA (and other countries with a lot of low cost coal) to reduce costly crude oil imports.

CTL can be a very clean process. Gasifying and then cleaning the syngas is a fine and economical way to produce clean syngas and is used in IGCC very clean coal power plants.

It appears that this project is a well thought out technical program. There was little discussion of the economics though. I would want to ascertain that the project will produce both clean, but also economical gasoline, and not be dependent on government subsidies.

We have see what happens with those kind of un-economic projects, that close down the moment the subsidy ends.

This will have limited traction in the US since many of the major nat gas drillers are shifting to US crude fields & using fracking technology (fracking for crude) since that's where the money is.

"Increasingly, the Chesapeake story is going to be more about oil [vs. gas]"
http://video.cnbc.com/gallery/?video=3000057658

It depends on who still runs the country, the Oilco, the President or the people?

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