Long-anticipated Leucadia project closer to reality

By 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