COAL into LIQUID

Coal-to-liquid plant in Montana to use Rentech technology

Denver firm owns patent for converting gas into clean diesel
Barry Gutierrez © News At Rentech's research and development laboratory in Denver on Wednesday, facilities engineer Eli Philipp, left, and Mark Koenig, director of investor relations, stand outside the company's Fischer-Tropsch reactor.
By Gargi Chakrabarty, Rocky Mountain News October 5, 2006
Montana is set to have one of the nation's first coal-to-liquids energy plant.
And Colorado will play an important part.
The $1.3 billion project will use a patented technology owned by Denver-based Rentech to convert gas - squeezed out of coal - into ultraclean diesel, naphtha and jet fuel.
Announcing the plant earlier this week, Montana Gov. Brian Schweitzer said, "I'm very excited about this one."
Rentech will earn a licensing fee from the project.
DKRW Advanced Fuels, Arch Coal Inc. and Bull Mountain Cos. are the developers of the project at the Bull Mountain mine 14 miles south of Roundup, in central Montana.
"Our licensing fee and royalties are fixed, based on formulaé," said Mark Koenig, Rentech's director of investor relations.
He declined to reveal details of the formulas.
The company is building a $20 million pilot plant in Commerce City, which will demonstrate the patented technology.
Rentech signed a master license agreement with DKRW Advanced Fuels earlier this year, which allows DKRW to use Rentech's Fischer-Tropsch coal-to-liquids technology in projects that produce up to 500,000 barrels of liquids per day.
DKRW is using the technology to build the previously announced Medicine Bow coal-to-liquid facility in Wyoming. That facility will produce 10,000 barrels of liquid per day but has the option to expand to 40,000 barrels per day.
Rentech also is considering a plant in Natchez, Miss.
Coal producer Peabody is looking to build two more, in Montana and in Illinois, using Rentech's technology.
The Bull Mountain mine project would produce 22,000 barrels of diesel fuel per day and use the rest of the gas to generate about 300 megawatts of electricity.
About two-thirds of the electricity would be needed for coal-to- liquid operations, and the remainder would be surplus, said John Baugues Jr. of Bull Mountain Cos.
Schweitzer said the project will capitalize on Montana's coal resources and strengthen the economy in a struggling area of the state.
An economic analysis prepared by a researcher at Montana State University-Billings projected the equivalent of 1,764 full-time jobs from operation of the plant and related work such as mining and rail transportation of coal. Annual wages and benefits for those jobs are projected at $194 million.
General Electric will provide the technology to convert the coal into synthetic gas.
chakrabartyg@RockyMountainNews.com or 303-954-2976. News wire services contributed to this report.