Wyoming facility to make diesel with clean coal process

Medicine Bow Fuel & Power, a subsidiary of DKRW Advanced Fuels, announced today that it's entered into a long-term contract to sell ultra-low-sulfur diesel fuel from its planned coal-to-liquids (CTL) facility in Wyoming, to Sinclair Oil, which will market the fuel in the Rocky Mountain region.

The planned project, which is to include a coal mine and adjacent CTL facility, will use an indirect liquefaction process to convert coal resources into refined products while reducing the environmental impact associated with coal combustion.

The facility plans to use General Electric's coal gasification technology to produce synthetic gas. The synthetic gas will be cleaned so that substantially all of the sulfur and carbon dioxide (CO2) is removed, the company says. The syngas will then be liquefied using Fischer-Tropsch technology licensed from Rentech. A further refining process will produce the ultra-low-sulfur diesel product that is expected to exceed current environmental emission standards in the region.

"We believe this agreement for the long-term supply of a Fischer-Tropsch, ultra-low-sulfur diesel product is the first of its kind," said Jon Doyle, DKRW Advanced Fuels' chief operating officer.

Construction of the CTL facility is scheduled to start in late 2007, with an expected in-service date in the fourth quarter of 2010.

In addition to liquid fuels, primarily diesel and naphtha, a number of byproducts of the liquefaction process, including carbon dioxide and chemicals, are expected to be sold for use in the region.

Sinclair Oil is an integrated energy business owning and operating exploration, production, refining, pipeline, trucking, and terminal and marketing assets. Nearly 3,000 service stations in more than 20 states brand under the Sinclair name.