DKRW to produce 11,000 b/d at proposed Medicine Bow CTL plant
Washington (Platts)--18Jan2006
Rentech Inc. and DKRW Advanced Fuels LLC signed an agreement last week that
allows DKRW to use Rentech's Fischer-Tropsch technology at current and future
coal-to-liquids plants.
Concurrently, DKRW's wholly owned subsidiary, Medicine Bow Fuel & Power LLC,
signed an individual site license with Rentech for the proposed Medicine Bow
Project in Carbon County, Wyo.
Under the terms of the agreement, DKRW may produce up to 500,000 barrels/day
using the FT process.
"This is the company's first domestic CTL license application," said Rentech
President and CEO Hunt Ramsbottom.
Rentech recently dissolved its FT Solutions partnership with Headwaters
Technology Innovation Group Inc., citing business development differences.
However, the company views its agreement with DKRW as an opportunity to
showcase its Fischer-Tropsch technology, Mark Koenig, Rentech director of
investor relations, told Platts Coal Trader on Tuesday.
In November, DKRW had to scale back the size of Medicine Bow for what the
company described as "feedback from capital markets." But Rentech isn't
concerned.
The reconfigured Medicine Bow is estimated to cost $1 billion-$1.5 billion,
compared with the original $2.75 billion price tag. The plant will produce
11,000 barrels/day of ultra-low-sulfur diesel and naphtha using 2 million
tons/year of coal purchased from Arch Coal.
"I think any time you develop a project, you run into financial obstacles. We
aren't concerned. We understand it's part of the process," Koenig said.
Bob Kelly, DKRW spokesman, told Platts Coal Trader that the company had a
couple of other CTL projects in mind, but nothing he could elaborate on.
"We think this agreement will help to push the technology pathway to liquids
production," Kelly said.
-- Regina Johnson, regina_johnson@platts.com
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