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Long-term commercial purchasing agreements have moved the long-anticipated Leucadia Energy gasification project to reality, according to a news release from the company. The plant will utilize 7,000 metric tons of petcoke a day acquired from Gulf Coast refiners under an agreement with Koch Carbon. Petcoke, above, is an energy-rich waste byproduct produced from refining high-in-sulfur content crude oil. (Special to the American Press)

Long-term commercial purchasing agreements have moved the long-anticipated Leucadia Energy gasification project to reality, according to a news release from the company. The plant will utilize 7,000 metric tons of petcoke a day acquired from Gulf Coast refiners under an agreement with Koch Carbon. Petcoke, above, is an energy-rich waste byproduct produced from refining high-in-sulfur content crude oil. (Special to the American Press)

Long-anticipated Leucadia project closer to reality

Last Modified: Sunday, October 28, 2012 11:22 PM

By Bobby Dower / American Press

Long-term commercial purchasing agreements have moved the long-anticipated Leucadia Energy gasification project closer to reality, according to a news release from the company.

Lake Charles Clean Energy, a subsidiary of Leucadia, has secured offtake agreements with BP Products North America, Air Products and Chemicals and Denbury Offshore for products that will be produced at the $2.5 billion facility. It will be located on Port of Lake Charles property along the Calcasieu Ship Channel near the Citgo Refinery.

The plant will utilize 7,000 metric tons of petcoke a day acquired from Gulf Coast refiners under an agreement with Koch Carbon. Petcoke is an energy-rich waste byproduct produced from refining high-in-sulfur content crude oil.

The facility will produce methanol, hydrogen, argon and carbon dioxide. BP Products will purchase the majority of the methanol, according to the news release, Air Products has agreed to purchase the hydrogen and argon and Denbury Offshore will buy 90 percent of the carbon dioxide produced by the plant.

The plant is expected to produce more than 1 million metric tons of methanol, 400,000 tons of sulfuric acid and 4.5 million tons of carbon dioxide.

‘‘The commercial offtake contracts with BP and Air Products, together with the existing long-term (carbon dioxide) contract with Denbury Onshore LLC, are major commercial milestones required to facilitate financing for the project,’’ said Leucadia Energy President Thomas E. Mara. ‘‘Having these companies as our customers validates our business model and our vision of bringing a clean fuels facility to Lake Charles.’’

The final step for the project is attaining third party financing and approval of the Leucadia board.

If that occurs, the company expects construction to begin in 2013 and provide up to 1,500 construction jobs during a three- to-four-year period.

Upon completion, the facility is expected to have 165 full-time employees.

Lake Charles Clean Energy was awarded $1.56 billion of Gulf Opportunity Zone (GO Zone) and Hurricane Ike tax-exempt bonds by the Louisiana State Bond Commission. LCCE also received a $261 million grant from the Department of Energy as part of an effort to capture carbon dioxide from industrial sources for beneficial use or storage.

LCCE received a Prevention of Significant Deterioration construction permit and a emissions operating permit earlier this year.

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