Rentech moves up Natchez project

Published 2:57 pm Tuesday, December 4, 2007

NATCHEZ —After a recent cost analysis revealed a savings of hundreds of millions of dollars, Rentech has decided to develop their Natchez coal to oil plant sooner that expected.

Oil production will now begin in 2011 instead of 2012.

Environmental legislation speculation also played a part in the decision to move up the project.

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In their original plan Rentech was going to first develop a plant in East Dubuque, Ill.

However, Rentech Project Manager Joe Regnery said since the Natchez plant will be smaller and require less equipment it will be built first.

Regnery said the Illinois plant, currently manufacturing ammonia, was going to be converted to allow the plant to also make diesel from gasified coal.

The cost associated with the conversion and equipment needed to do this was approximately $900 million.

Of that money one expense was the inclusion of a system to handle the vast amounts of carbon dioxide that are made as a byproduct.

Regnery said the coal-to-liquid company’s leaders were concerned that future legislation against greenhouse gasses would make operations in Dubuque even more difficult since infrastructure to handle the carbon dioxide is not existent in the area.

But for each problem in Dubuque, Natchez has the solution.

Since the Natchez plant will be smaller that the Dubuque plant it will need fewer pieces of equipment. The Natchez plant also does not need to be modified in order to capitalize on ammonia production like the Dubuque plant.

In the end Rentech’s facility in Natchez will be able to produce the same amount of product at a smaller facility for approximately $400 million.

Equally as important, future legislation regarding carbon dioxide should not be a problem either.

Denbury Resources, located on U.S. 84, has already committed to purchasing Rentech’s carbon dioxide.

Denbury will use Rentech’s carbon dioxide in a long-term oil sequestration project in the Natchez area.

Regnery said the pre-existing agreement with Denbury greatly enables the future of the project.

Since Rentech will now place a greater concentration on the Natchez plant planning and development will happen sooner Regnery said.

Regnery said when Rentech signs the land purchase papers in April they will start site preparations.

“We are going to start moving forward.”