Southeast Idaho Energy (SIE) LLC, American Falls, Idaho, announced June 27 that it is moving ahead with plans to construct a $2 billion nitrogen and energy facility in Power County, Idaho. Named the Power County Advanced Energy Center, it will produce nitrogen fertilizer and ultra-low-sulfur diesel fuel.
Ramesh Raman, SIE president, said the company is ready to begin the process of obtaining permits for the facility. The Center will be located in the heavy industrial zone southwest of American Falls, south of the Lamb Weston plant and east of Idaho Power’s Borah substation. SIE has an option on more than 450 acres there.
Raman said the Center would be built in two phases. In Phase 1, estimated at $1 billion, SIE would install one gasifier to turn coal and petroleum coke into more than 4,000 st of nitrogen and 1,400 barrels (58,800 gallons) of diesel per day.
The nitrogen plant will produce 1,650 st of anhydrous ammonia, 500 st for sale and the rest for urea production, according to John Burk, SIE director of communications. Urea production will be 1,500 st/d, with 1,200 st/d granulated. The plant will also produce 1,400 st/d of UAN.
Burk said the company is talking with several potential customers for its products and is optimistic about reaching an agreement soon. It is also working to line up coal and petcoke supplies.
There will also be byproduct sulfur, with the quantity depending on the sulfur content of the fuel. SIE expects to produce at least 125 st/d and use it to produce sulfuric acid. It has also begun preliminary discussions with these buyers.
In Phase 2, estimated at another $1 billion, the company would add two gasifiers to boost diesel output to 8,400 barrels (350,000 gallons) per day.
Burk said WorleyParsons will do the engineering, Zachry will be the construction contractor, and Conoco Phillips will provide the gasifiers. He could not provide details on the investors in the project at the current time, but said he should be able to do so in the future.
SIE hopes to begin construction late next year, with startup of Phase 1 in 2011-12. Construction will require about 700-1,000 workers over a six-year period. Raman said that approximately 150 employees would be needed to operate Phase 1 facilities.
“We will be creating jobs that pay well,” he said, “and we are committed to hiring locally. As we approach operations, we plan to work with local institutions to create a workforce training program.” Besides stimulating the local economy, the project will contribute to local taxes. “We expect to make a substantial contribution to the tax base of Power County,” Raman said.
SIE is a subsidiary of Refined Energy Holdings (REH), which is headed by Raman and based in Mount Kisco, N.Y. and Denver, CO. Raman said REH has secured the equity funding necessary to advance the project. “Once we receive our permits, we will seek a lender to complete the financing of the Advanced Energy Center,” he said.
“This project is a small, important step toward energy independence,” said Raman. “Significant advances in technology now make it possible for our country to put its vast coal resources to clean use and reduce our dependence on imports. We will demonstrate to the Idaho Department of Environmental Quality that our Center will operate well within the most stringent air quality standards, which are set and enforced by federal and state government agencies to protect human health and the environment. Advanced clean coal and environmental technologies enable us to do so.”
SIE says it has secured water rights to meet Phase 1 and Phase 2 requirements. In Phase 1, the Center is expected to use up to two million gallons per day. SIE plans to design the facility for zero water discharge.
“The Power County Development Authority (PCDA) deserves a great deal of credit for the project,” Raman said. “Through the support and efforts of PCDA, we have defined a project that makes sense for us, for the county and for its residents. It also makes sense for Idaho. There is an excellent market for fertilizer and diesel products in the state, and in the region as well.”
Almost two years ago, Raman proposed an electric generating plant for the FMC site in eastern Power County. “As the project evolved, we became convinced that a facility to produce fertilizer and diesel not only made commercial sense, but also would have greater benefits for the region,” he said. Raman explained that as plans for the Center developed, “We found that the available property at the FMC site could not accommodate the Center.” He thanked FMC for its efforts to help him make use of the FMC site.
The Advanced Energy Center will produce electricity for internal use. Raman said SIE will keep Power County residents informed as the project progresses. “In addition, we are interested in any ideas and questions that residents might have. That’s an important part of our commitment to ensuring that our facility will be a positive addition to the county.”
Industry observers last week were awaiting more details about the project. One source said the pivotal issue is financing; the true news about SIE will not come until that is achieved. Another acknowledged that SIE has indeed been making the rounds with large industry players, but said it is still very early in the process. Buyers might welcome a new nitrogen producer in the region, what with the region mainly served by two local producers – Agrium Inc. and J.R. Simplot Co. – and importers.
While the number of proposed coal-gas projects continues to grow, sources noted that the U.S. Senate on June 19 failed to put coal-to-liquid incentive amendments in the Clean Energy Act of 2007. However, industry proponents say coal-gas incentives will rise again, as some form or fashion of incentive has bi-partisan support from at least 69 of the 100 senators. They say no fewer than 69 senators voted for at least one form of coal-gas amendment, and they are hoping they can come together on one they can all support. Another source observed that states getting the coal-gas facilities can be relied upon for some support. To date, Illinois, Mississippi, and Alaska have been supportive of such projects.