By OGJ editors
HOUSTON, July 19 -- Rentech Inc.'s wholly owned subsidiary Rentech Development Corp., Denver, and Peabody Electricity LLC, a wholly owned entity of St. Louis-based coal company Peabody Energy, have signed a joint agreement to develop two coal-to-liquids (CTL) projects on Peabody coal reserves in Montana and the US Midwest.
The partners propose building CTL plants using Rentech's proprietary Fischer-Tropsch CTL process that transforms synthetic gas derived from coal into diesel, jet fuel, and other products. One project targets production of 10,000 b/d of transportation fuels from 2-3 million tonnes/year of coal, while the other would produce up to 30,000 b/d using 6-9 million tonnes/year of coal, based on coal quality. With more than 9.8 billion tonnes of coal reserves, Peabody is evaluating dozens of US sites for btu-conversion projects.
During initial project development, Peabody and Rentech will determine locations, production volumes, product mixes, and environmental considerations, including being "carbon capture" ready for each facility. The companies will first determine the scope and feasibility of each facility, establish a project entity, and prepare front-end engineering and design.
Initially they will share the costs of third party development expenses and will have equal interests in the projects. "With the exception of the agreed upon sites, the joint development agreement is nonexclusive, and either party may develop CTL projects at other sites," a Rentech spokesperson said.
The CTL projects are predicated on the US Department of Defense's recently issued request for proposals to create significant quantities of Fischer-Tropsch fuels to help meet what the US Energy Information Administration forecasts will be more than a 70% increase of global energy consumption by 2030, when it says the US will import 62% of its oil.
