Plans for Decatur coal-to-gas plant move forward
Secure Energy Inc., a St. Louis-based company developing a $550 million plant in Decatur, Ill., to convert coal to natural gas, has entered a long-term sales agreement with a unit of oil giant BP PLC.
Under the agreement, Secure Energy can sell gas to industrial customers in Decatur. BP Canada Energy Marketing Co. will purchase any unsold fuel — up to 67 million cubic feet of gas a day.
The agreement represents a milestone in the development of the Decatur plant, which is expected to be complete by the summer of 2011, said Lars Scott, a former Peabody Energy Corp. executive who co-founded Secure Energy several years ago.
Technologies to convert coal into other energy forms, such as natural gas or diesel, aren’t new, but they were cost-prohibitive in the era of cheap oil. Today, they’re getting another look because of higher petroleum prices.
The price of natural gas, which ranged between $1 and $2 per thousand cubic feet the 1990s, has averaged almost $10 per thousand cubic feet so far this year electronic check payday advance. The price also has been especially volatile, spiking above $13 in June only to fall below $8 this month. Despite the decline, the project remains viable, Scott said.
The plant will use about 1.4 million tons of high-sulfur Illinois coal a year to produce 20 billion cubic feet of natural gas — enough to heat 250,000 homes.
Secure Energy is in talks to find a coal supplier, Scott said. A previous agreement to purchase coal from International Coal Group Inc.’s Viper Mine in eastern Illinois expired.
The plant, to be built on a site purchased last year from Caterpillar Inc., will employ about 60 people, he said. Construction is expected to take 20 to 24 months.
Secure Energy received an air permit from the state in April 2007 and it has other major permits required to begin construction.
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