Alter NRG plans C$4.5 billion coal-to-liquids plant
Tue Jul 22, 2008 6:01pm BST
uk.reuters.com
[ Welcome back Johnlw. Nice to see some else post on this thread for a change ]
CALGARY, Alberta, July 22 (Reuters) - Alter NRG Corp (NRG.V: Quote, Profile, Research), a small alternative energy firm, said on Tuesday it plans to build a C$4.5 billion ($4.46 billion) coal-to-liquids plant in northwestern Alberta to produce diesel and naphtha fuels and capture carbon dioxide.
Alter NRG, which went public 15 months ago, will develop a coal mine near Fox Creek, Alberta, 260 kilometers (162 miles) northwest of Edmonton, and build a plant to convert the coal into as much as 40,000 barrels per day of diesel and naphtha, which is blended with heavy oils so they can be shipped on pipelines.
The plant would be a first in Canada, but coal-to-liquids technology is used worldwide, particularly in South Africa, where Sasol (SOLJ.J: Quote, Profile, Research)is the world's biggest producer of fuel from coal.
Best known for its massive oil sands, the biggest oil reserves outside of the Middle East, Alberta also has the lion's share of Canada's coal deposits, with proven reserves of 33.6 billion tonnes.
Alter NRG, which has a market capitalization of less than C$250 million, is hunting for a partner to help develop the project, and seeks mining, energy and gasification firms willing to take a stake.
"We want to find a partnership (or) joint-venture structure or even a separate entity and then that partnership will look to capitalize the project," said Daniel Hay, Alter NRG's chief financial officer.
Hay said Alter NRG thinks operating costs to produce a barrel of diesel fuel using the coal-to-liquids technology will range between C$25 and C$30 a barrel and capital costs will be between C$12 to C$18 a barrel and generate returns higher than 20 percent.
The company plans to develop the project in two, 20,000-barrel-per-day phases. Construction of the first phase, which would cost C$2.7 billion, would see a mine operating by 2013 with the CTL plant complete a year later.
Alter NRG also plans to capture most of the carbon dioxide emitted by its plant. The company said the CO2 may be used to boost oil output from about 30 fields near its planned facility.
"Within 60 miles of Fox Creek are some of the largest light oil fields in Canada that are actively looking for CO2 injection to increase their oil recoveries," Hay said.
Alter NRG shares fell 14 Canadian cents to C$4.25 on the TSX Venture Exchange. The stock has climbed 56 percent over the past 12 months. ($1=$1.01 Canadian) (Reporting by Scott Haggett; Editing by Bernadette Baum) |
