ConocoPhillips and Peabody Energy Corp. have selected a site near Central City, Ky. to be the location of a $3 billion coal-to-natural-gas facility.
The Houston energy giant and St. Louis-based coal company have filed an air permit with the Commonwealth of Kentucky for development of the facility, which will be known as Kentucky NewGas.
If approved by the Commonwealth, the facility will create about $100 million in regional economic benefits annually and is expected to produce enough energy for nearly 750,000 Midwest homes, according to the companies.
ConocoPhillips (NYSE: COP) and Peabody (NYSE: BTU) agreed in July 2007 to build the facility, which will produce between 50 billion and 70 billion cubic feet of synthetic natural gas annually from more than 3.5 million tons of coal.
In October 2007, Peabody received preliminary approval from the Kentucky Economic Development Finance Authority for up to $250 million in tax incentives for the project.
The “mine-mouth” gasification project would use ConocoPhillips’ proprietary E-Gas technology to produce clean-burning natural gas, according to the companies. Kentucky NewGas will meet regulatory standards to protect the environment, including adoption of low-emissions design criteria, anticipated to be less than 5 percent of the emissions of a comparably sized traditional coal plant.
Houston Business Journal - Tuesday, December 16, 2008