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South African Company Looks at Coal Plant in Montana

Posted on: Tuesday, 18 October 2005, 03:01 CDT

By Johnson, Charles S

HELENA - Some executives from Sasol Ltd., a South African oil and gas company, will visit Montana this weekend as they consider whether to build a $5 billion coal-conversion plant here that could employ 2,000 people, U.S. Rep. Denny Rehberg said Wednesday.

Gov. Brian Schweitzer said later he will take the officials on a flight Sunday to show them the vast coal holdings in southeastern Montana, including the state-owned Otter Creek tracts.

Rehberg, a Republican, said he has lined up meetings for Sasol officials with some key House members in Washington, D.C., after they've visited Montana.

Passage of the federal energy bill this summer makes a project like this one a possibility because of tax incentives and loan guarantees, Rehberg said. Sasol's chief executive officer will be coming to Washington in a few weeks, he said.

"The energy bill gives them the opportunity to expand," Rehberg said in a telephone press conference. "We've got the resources and the desire for the jobs and the kind of coal they need."

Sasol is considering building two coal conversion plants in the United States, with Illinois and Wyoming also pitching for the facilities, Rehberg said. Sasol is the world leader in coaltoliquids, Fischer-Tropsch technology, which allows liquid fuels and chemicals to be produced from coal and petroleum coke, he said.

Such a plant could turn out 80,000 barrels of liquid fuel daily, employ 2,000 at the plant, not counting mining jobs, he said.

Rehberg said one advantage Montana has over Wyoming is the unencumbered, state-owned Otter Creek coal tracts.

Schweitzer, a Democrat who has made such a coal conversion, facility a top priority, said he had contacted the Sasol officials by telephone earlier as part of his effort to get some plants built in Montana to convert coal to liquid fuels and natural gas through the Fischer-Ropsch process.

The Sasol official asked Schweitzer what the minemouth price of low sulfur coal was in Montana, and the governor told him the current price.

"There was a huge silence on the phone, and he came back after 20 seconds," Schweitzer said. The Sasol officials asked again about the price and then said: "I'll be there in the third week of September."

"I've been beating the bushes all over the world for this," Schweitzer said. He said Shell's CEO visited Helena to talk about it, and he has discussed it with officials from General Electric and Southern Co.

Schweitzer said he will use the governor's plane to fly the Sasol executives to Colstrip, Sarpy Creek and Decker, Otter Creek and some areas with lignite coal. Then they will return to Helena where the governor said he would serve them "a thick Montana steak and some Montana beer."

Copyright The Missoulian Sep 16, 2005

Source: Missoulian

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