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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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SO they are going to buy carbon from a gassification process, then use that carbon dioxide to inject into the ground in order to force out the last bits of petroleum that are in otherwise unreachable areas....

Does anyone else out there think they are desperate?

Any person who can read and do a little bit of arithmetic, can find the average cost of coal sold by a coal company, but coal used at the mine for gasification can be much lower quality and even much cheaper per unit energy than that sold to power plants by rail.

The liquid iron or iron-tin alloy gasification processes ought to be tried here on a large scale to save on energy and CO2 production even if the CO2 is captured. The recovery of CO2 and even SO2 for enhanced oil recoveryfrom deep wells is a very good idea proven in several cases already. Great Plains in North Dakota sells CO2 to Canadian oil fields and might be able to do it for Bakken wells or others in North Dakota or Montana. There is no reason to leave known oil in the ground and import oil from other countries at very high prices.

Petroleum products can be made from water and CO2 with the energy from high temperature pebble bed or other reactors, and such reactors will not have any chance of reactor over pressure or over heat failure. Once the capital expense of such a unit is paid for the energy to make a million pounds of jet fuel can be provided by a pound or less of uranium or thorium or waste reactor grade, non explosive, Plutonium. The US has tons of such plutonium in storage, and many more tons of already mined and purefied uranium that could last for more than a century of energy for the US without another gram being mined. High temperature reactors that do not use water to cool the fuel directly do not require expensive water and gamma and neutron resistant pipes and construction and can produce heat at very low cost and very low risk of death to the public. Not one person was killed yet by radiation due to the Tsunami destruction of the Japanese power plants, but several or even many people were already stressed to death by the lack of power caused by turning off and not restarting working reactors. Others were killed by the increased air pollution from substitute generators and fuels including more liquid natural gas.

Fifty or more coal to liquids units should be built. Even with no CO2 capture, it cannot be proved that more CO2 is released than with conventional oil and losses and refining and transportation and flaring because their is no oversight of foreign operations.

The workers needed and the monies saved on imported oil would very much improve the world economy and provide employment. Australia should be required to make all of its liquid fuel requirements from its own coal before it can ship any coal abroad. ..HG..

Five dollars or even 20 dollars for a ton of coal can produce the equivalent of two barrels of oil or more. I repeat; a massive effort should be done world wide for coal to liquids. Where is SASOL? Making petrochemicals in China for plastics? ..HG..

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