Rentech Announces Plan for First Commercial Ultra-Clean Synthetic Fuels Plant That Will Lower Costs and Reduce Carbon Emissions
newsobserver.com
Published: Dec 04, 2007 09:24 AM
Modified: Dec 04, 2007 09:27 AM
Rentech Announces Plan for First Commercial Ultra-Clean Synthetic Fuels Plant That Will Lower Costs and Reduce Carbon Emissions
Management Conference Call at 9:00 AM PST
LOS ANGELES - Rentech, Inc. (AMEX:RTK) announced today that the Company will build its first commercial synthetic fuels plant utilizing the Rentech Process at the site of its proposed Strategic Fuels and Chemicals Complex in Adams County, Mississippi near the city of Natchez ("Natchez"), rather than at its existing fertilizer plant in East Dubuque, Illinois.
Rentech purchased Rentech Energy Midwest Corporation ("REMC"), an ammonia nitrogen fertilizer facility, in East Dubuque, Illinois, in April 2006, with plans to improve the economics of the facility by converting the feedstock from natural gas to coal using gasification technology and then using the excess capacity in those gasifiers to run a commercial scale Rentech reactor.
The plan to build Rentech's first commercial scale reactor at Natchez is being driven by several factors including: the uncertainty surrounding proposed greenhouse gas legislation which could increase operating costs at REMC post-conversion; strong pricing and demand for fertilizer products at REMC; and recent changes in the relative economics for coal gasification versus natural gas feedstock at REMC as a result of stabilized natural gas prices and rising construction costs.
The move to Natchez will enable the Company to build and operate a full commercial scale reactor at a lower overall capital cost than the proposed REMC conversion, to lower emissions of carbon dioxide through carbon capture and sequestration, and to achieve design, cost and efficiency improvements in the overall Natchez project.
The Natchez facility, which will help meet the nation's growing need for clean-burning, alternative transportation fuels, will now be built in two phases. The Company is targeting to complete Phase 1, the production of 1,600 barrels per day, in 2011 or earlier. The Company's preliminary estimate is that Phase 1 will cost less than half the cost of the previously announced plan to convert the REMC facility. Rentech is targeting to produce an additional 28,000 barrels per day during Phase 2 of the Natchez project.
"We are pleased that we have an alternative site which, under current market and public policy conditions, is ideally suited for the commercial scale up of the Rentech Process,'' said D. Hunt Ramsbottom, President and CEO of Rentech. "By redirecting our initial production efforts to our Natchez facility, we can preserve the enhanced value of REMC resulting from the dramatically improved market conditions for the products produced there, lower our capital costs and reduce our carbon footprint."
Using the patented Rentech Process, Natchez Phase 1 will be designed to use coal or petroleum coke together with at least 5% (as measured by energy content) of biomass as the gasification feedstock. In addition, the captured carbon dioxide that will be produced at this facility is designated to be sold under an existing long-term agreement with Denbury Resources for enhanced oil recovery in the region. With the carbon capture and sequestration plan as well as a biomass blend, the carbon dioxide emissions from the production of fuels at Natchez Phase 1 are expected to be substantially lower than those generated in the production of petroleum-derived fuels. The Company believes the fuels produced at this facility will be among the most greenhouse gas friendly fuels available in the country.
Rentech will continue to pursue its permitting efforts at REMC. Receipt of the permits is one of the factors that will enable the Company to move forward with the REMC conversion in the event that market and public policy factors change, such as construction of the Midwestern Governors Association's proposed carbon dioxide pipeline.
Rentech, Inc. Julie Dawoodjee, 310-571-9800, x341 Director of Investor Relations ir@rentk.com
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