Coin'jecture' 15 minutes ago Just thought I would put the proper title on this e-mail.
The Facts Are Quite Different, Bechtel Has A Completed Design & the AMOUNT of MONEY AVAILABLE Would AMAZE YOU !
It would be unfair to characterize the current situation as "the Evergreen executives came back from Asia empty handed". On the contrary, I suspect you'll find they have been MUCH more engaged with Sumitomo than the rumor mills suggest. Sumitomo's interest in K-fuel is very real, especially considering the discovery that the k-fuel process can turn otherwise useless lignite into valuable power plant fuel, comparable to high-priced steam coal. This renewed interest in building new k-fuel production facilities has been stimulated by record high coal prices in recent months, as well as record high transport costs. (The k-fuel process squeezes out much of the coal's moisture, greatly increasing the total BTU's per ton, which ultimately lowers transport costs.)
Let's go back in history by three years, and revisit that Arch Coal Creek contract. Arch wanted an 8 million ton K-fuel plant at their Coal Creek mine, more than 10X the size of Ft. Union, but the whole deal was contingent upon Evergreen demonstrating the Ft. Union plant fully ramped up. Unfortunately the Ft. Union plant had some major design flaws, and Evergreen didn't have enough money to completely overhaul it. However, at no time did those design flaws ever significantly impact the demand side of the equation. The Ft. Union plant did work well enough to facilitate K-fuel test burns for large commercial customers, all of which were successful. When Evergreen finally demonstrates a fully functional plant, big customers like Arch will get back on board. Right now there are a lot of interested customers sitting on the sidelines, just waiting for somebody else to give Bechtel a chance to prove their new plant design.
So now we've got a tricky situation. Lots of customers want K-fuel, assume that Bechtel can probably build a working plant, and most likely believe in the total k-fuel value proposition. HOWEVER, most big companies like Arch and BHP want solid proof first. That's just prudent business sense. To get this whole thing moving forward somebody else must make the required investment in the first Bechtel plant.
The big challenge currently confronting Evergreen is to demonstrate a fully operational plant ASAP, and prove to the world that K-fuel can be mass produced in a commercially viable manner. Fortunately there is some flexibility in how exactly this goal is achieved:
1. Build the Indonesia plant using the new Bechtel design, and take advantage of the low cost lignite and huge Asian demand.
2. Build the domestic river port plant, with flexible feedstock and transport options.
3. Overhaul the Ft. Union plant, which could probably be done inside of a year for somewhere in the area of $50M - $70M (roughly half the cost of a new plant, in half the amount of time.)
4. Some combination of the above Rating :
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