Denbury to buy more manufactured CO2 for EOR

Denbury Resources Inc. agreed to buy carbon dioxide for enhanced oil recovery from Rentech Inc.'s proposed synthetic fuels plant to be built in Natchez, Miss.

Jun 26th, 2007

By OGJ editors
HOUSTON, June 26 -- Denbury Resources Inc. agreed to buy carbon dioxide for enhanced oil recovery from Rentech Inc.'s proposed synthetic fuels plant to be built in Natchez, Miss.

Gareth Roberts, Denbury chief executive, said the agreement with Rentech will provide more CO2 supplies for Denbury as it expands tertiary operations in the Gulf of Mexico coastal area.

Initially, Denbury will use the CO2 for EOR in Cranfield and Lake St. Johns fields near the Mississippi-Louisiana border. A spokesman said that there will be more CO2 than will be needed by those fields.

The company holds operating acreage onshore in Louisiana, Alabama, in the Barnett Shale play near Fort Worth, Tex., and in Southeast Texas. Denbury plans to build a CO2 pipeline from the Natchez plant. Details were not yet available.

Using a patented Rentech derivative of the Fischer-Tropsch process, the Natchez plant will be designed to use petroleum coke, coal, and biomass as feedstock. The particular feedstock to be used remains undetermined, a Rentech spokesman said.

Rentech's final investment decision on whether to build the plant will be made by Dec. 31, he said. Initial plans call for the plant to produce 25,000 b/d of synthetic fuels and specialty chemicals. It is to be completed in 2012 and would be expandable to 50,000 b/d.

Denbury said it expects to purchase 350-400 MMcfd of CO2 from Rentech's Natchez proposed plant. Terms were not disclosed.

Other CO2 sources
Previously, Denbury signed CO2 purchase contracts for two other planned gasification plants proposed by Faustina Hydrogen Products LLC, one expected to be built near Donaldsonville, La., and another planned for construction near Beaumont, Tex.

If all three plants are built, total manufactured sources will provide Denbury with 750-850 MMcfd of CO2 by 2012. Denbury already owns substantial CO2 reserves on the Jackson Dome in south-central Mississippi. It operates and is expanding a network of CO2 pipelines in the region.

Denbury said it plans to connect the manufactured sources of CO2 to its natural source of CO2, allowing the company to allocate production as required between the two sources.

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