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DKRW Advanced Fuels secures EPC contract with Sinopec Engineering for Medicine Bow coal-to-liquids project in Wyoming
5 September 2012
DKRW Advanced Fuels LLC (DKRW) announced that its wholly owned subsidiary, Medicine Bow Fuel & Power LLC (MBFP), has entered into a fixed price Lump Sum Turn Key (LSTK) Engineering Procurement and Construction (EPC) contract with the Sinopec Engineering Group (SEG). Using bituminous coal from southern Wyoming, the Medicine Bow facility will produce 11,600 barrels per day of very low sulfur gasoline using GE gasification technology and methanol‐to‐gasoline (MTG) technologies. (Earlier post.)
Under the terms of the contract, SEG will provide turn‐key engineering, procurement and construction services for the DKRW industrial gasification and liquefaction facility located at Medicine Bow in Carbon County, Wyoming.
SEG is a share‐controlled subsidiary of the Sinopec Group , one of the largest energy companies in the world. SEG was selected to build the Medicine Bow facility after an international competitive tender based on its extensive experience in coal gasification and liquefaction technology.
Securing the EPC contract is a significant milestone for the Medicine Bow project.
Previously MBFP announced the signing of an agreement for the purchase of all of the gasoline produced from the facility. Other firms have been contracted to develop and enhance necessary infrastructure, including the construction of a roughly 100‐mile pipeline from Medicine Bow to Cheyenne.
The project will capture 92% of the CO2 generated throughout the development process and provide the liquefied CO2 for use in the enhanced oil recovery market in the Rocky Mountain region. Denbury Resources Inc., one of the leading producers of natural carbon dioxide utilized for CO2‐enhanced oil recovery in the United States, has agreed to purchase all of the carbon dioxide captured by the plant. Denbury plans to use the CO2 to recover significant amounts of otherwise stranded oil from existing oil fields in the Rocky Mountain region while also providing a way to capture and store the CO2.
The CO2 captured from the MBFP process will be used and stored in the depleted oil reservoirs resulting in a gasoline product with one of the lowest carbon footprints in the US refining mix. The plant, once built, will be the first commercial‐scale project in the United States utilizing carbon capture and sequestration technology, and will use a fraction of the water needed by a pulverized coal facility of a similar size.
The Medicine Bow project is co‐located with the 180‐million‐ton Carbon Basin coal reserve owned by Arch Coal, which is also an equity investor in the project. The facility will convert one ton of coal into two barrels of traditionally oil‐based products, including gasoline, thus creating a 360‐million‐barrel‐of‐oil equivalent reserve at the Medicine Bow site.
DKRW Advanced Fuels is a hydrocarbon conversion development company, and is focused on the commercial development, construction, ownership and operation of facilities designed to convert lower‐value hydrocarbons into products that traditionally have been produced by crude oil through the utilization of commercially available technologies. The Medicine Bow Project is its initial project.
DKRW Advanced Fuels is a subsidiary of DKRW Energy LLC. Arch Coal, one of the largest global coal producers is also a shareholder in DKRW.
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