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Louisiana's Refinery Waste May Find New Life as Synthetic Gas

NC12 Inc., formerly Texas Syngas Inc., is readying an effort to construct a synthetic natural gas facility near some Louisiana oil refineries that would convert used coal and petroleum coke wastes into gas.

Company officials in early 2009 are expected to unveil their joint venture plans with a "major" utility to finance, construct and operate the facility, which could produce "several hundred" Bcf a year using NC12's catalytic technology.

More than half of the planned facility's production capacity already has been sold and negotiations are continuing to sell the remaining capacity, according to C Change Investments officials, who have become equity partners in the Houston-based company.

"This is a transformative technology with significant competitive and environmental advantages," said NC12 CEO Michael Sydow. "A wide range of carbon-based materials can be converted to synthetic natural gas and liquid motor fuels with very high efficiency and essentially zero emissions. This is a breakthrough in energy production from essentially unlimited domestic resources."

The project, estimated to cost $3.5 billion, would be constructed in stages, according to NC12. In the first phase, 10 reactors producing 50 Bcf/year would be built over a two-year period. Over another four years, output would ramp up to around 250 Bcf, according to officials.

The facility would be able to produce natural gas at less than half the cost of other gasification technologies now in demonstration stages, and production costs would be equivalent to the wellhead production cost to develop Gulf of Mexico gas, C Change officials stated.

Three byproducts from the gasification process -- carbon dioxide, sulfuric acid and nonleaching slag -- apparently would be sold to commercial interests. If the process proves successful, NC12 officials said their company would be among the first to capture and sequester a substantial amount of CO2 on a commercial scale without the need for government subsidies.

"NC12 intends to develop other production facilities in strategic locations to serve the nation's increasing demand for natural gas," said Sydow. "Several locations are under active consideration. The market for this technology in Europe is very significant, and we will pursue opportunities there as well."

C Change CEO Russell Read is joining the NC12 board of directors. C Change also would help with project financing for the joint venture and other projects NC12 may pursue, officials said.

"The modular nature of the technology allows for staged financing and expeditious manufacturing and construction," said Read. "Unlike other large-scale, energy production facilities, this project will have its first phase in commercial production while its last phase is under construction. That's an advantage in any type of credit market condition."

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