Date Moved Up for Natchez Plant — Rentech Says Facility Should Start Coal-to-Oil Production in 2011

NATCHEZ – Rentech Inc. is pushing back its timetable for work on an Illinois coal-to-oil plant to speed up work on its smaller facility in Adams County, officials say.

Joe Regnery, Rentech’s project manager in Mississippi, said Tuesday that oil production should begin at the Natchez plant in 2011 instead of 2012.

Originally, Los Angeles-based Rentech was going to first convert a natural gas-fed fertilizer plant in East Dubuque, Ill., by the end of 2009 or 2010. Production there would have started at 920 tons of fertilizer and 1,800 barrels of diesel a day.

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

Regnery said Rentech, which makes technology that helps produce synthetic fuels, had expected to spend $900 million on conversion and equipment at the Illinois plant. The expenses included installation 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 East Dubuque even more difficult since infrastructure to handle the carbon dioxide is not existent in the area.

Since the Natchez plant will be smaller than 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 about $400 million, Regnery said.

Dallas-based Denbury Resources Inc., an oil and natural gas company, has committed to purchasing Rentech’s carbon dioxide for use in an oil recovery project in the Natchez area.

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

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

Originally published by Associated Press .

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