Eastman Chemical Co., Kingsport, Tenn., has taken over as the 100 percent owner and sole developer of the $1.6 billion Beaumont, Tex., industrial gasification project with the acquisition of the 50 percent owned by Green Rock Energy LLC, which is owned by the D.E. Shaw group and Goldman, Sachs & Co.
Eastman Senior VP and CFO Richard Lorraine explained that the transaction grew out of differences in strategy criteria. “Beaumont remains on track with the previously announced development milestones and we expect it will contribute approximately $2 of corporate earnings per share. We also continue to pursue additional industrial gasification projects that meet our investment criteria.”
Eastman expects to complete the front-end engineering and design for the Beaumont gasification facility in the second half of 2008, and to obtain non-recourse project financing by year end 2008. Plans call for the plant to be online in 2011. The Beaumont property was bought from Terra Industries Inc. (GM Oct. 8, 2007, p. 1). The property already contained an idled 255,000 st/y anhydrous ammonia plant and a methanol plant that can produce 225 million gallons per year, as well as storage for both products. Eastman says it has no plans to add more fertilizer capacity.
In addition, Eastman announced the divestiture to Green Rock of its 25 percent ownership interest in the Faustina Hydrogen Products LLC (FHP) industrial gasification project in St. James Parish, La. No terms for either transaction were disclosed.
The FHP project has also had a $1.6 billion price tag, though those were in 2007 dollars (GM June 8, 2007, p. 1). The FHP project is expected to be petroleum coke-based and produce 1.3 million st of anhydrous ammonia, with Agrium Inc. and The Mosaic Co. taking 40 percent and 60 percent of the product, respectively. Agrium also has an option to obtain a sufficient supply of carbon dioxide for the potential development of a large-scale facility for upgrading ammonia to UAN/urea. Neither Agrium nor Mosaic is expected to have an equity position in the facility.