Developer to build $5 billion synfuels plant in Louisiana

Developer to build $5 billion synfuels plant in Louisiana

Birmingham, Alabama (Platts)--16Jun2006

A new synfuels company plans to build a $5-billion lignite gasification
plant in Louisiana that would produce a variety of fuels and electricity,
officials said.

State Governor Kathleen Blanco announced the proposed plant Thursday. It
is to be built by institutional investor-backed developer SynFuel Inc., which
would be headquartered in Baton Rouge, Louisiana.

The company plans to file for its environmental permits by the end of
June, and start construction by June 2007, with partial fuel production to
begin in June 2009.

The plant would produce methanol, ethanol, synthetic gas, liquid
petroleum gas, gasoline, sulfuric acid and agglomerate, a road construction
material. The final production line would be completed in June 2010.

US entrepreneur Paul Hsin Liu, SynFuel's president and an investor in the
project, said the plant would be a pilot for best available technology and
would meet the Department of Energy's FutureGen environmental requirements.

SynFuel wants to sell the co-generated electricity to four large
petrochemical plants that would be located near the Ascension Parish facility.

"We understand whatever we end up doing will be subject to Public Service
Commission approval," a Louisiana Development Authority spokesman said.

Officials from BASF said they have been in discussions with SynFuel and
are interested because of the potential cost savings. Governor Blanco said the
other petrochemical plants in the area--Hexion Speciality Chemicals, Chemtura
and Rubicon--have expressed interest in doing business with the company.

Synfuel is in preliminary discussions for long-term fuel supply contracts
with the companies, the LDA spokesman said. The plant would use GE Energy
technology to gasify the lignite and produce synthetic gas. It would use
Haldor Topsoe technology to produce methanol and ExxonMobil technology to
produce gasoline. Sinopec technology would be used to integrate all the
elements, he said.

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