DKRW Advanced Fuels’ conversations with the U.S. Department of Energy over a $1.75 billion loan guarantee for a coal gasification plant continue, a company executive said Wednesday.
Representatives of the Houston-based firm are scheduled to travel to Washington, D.C., later this summer to meet with Energy Department officials and answer questions about the project, DKRW Executive Vice President Wade Cline said.
Among the topics on the agenda are DKRW’s efforts to secure a new construction company to build a $2 billion plant outside Medicine Bow capable of turning coal into liquid petroleum products.
Earlier this year, DKRW terminated its contract with Sinopec Engineering Group, claiming that the Chinese firm had breached the terms of its contract. Sinopec said it had not.
“We’re in discussions with DOE,” Cline said. “We’ve had a number of phone calls, a number of information exchanges.”
The Energy Department has repeatedly said it does not comment on applications under consideration.
DKRW has had an on-again, off-again relationship with the federal agency. In 2009, the DOE said it would consider the company’s application for a loan guarantee.
But DKRW officials signaled that they would seek private financing in the wake of the controversy over loans given to Solyndra, a solar panel manufacturer that went bankrupt.
Earlier this year, the company said it was placing renewed hope in government financing following the installment of Ernest Moniz as energy secretary.
The coal gasification plant has faced a series of hurdles since it was first proposed a decade ago. Financing for the project dried up during the recession, and the company briefly was out of compliance with its state permit last year.
The Wyoming Industrial Siting Council later granted DKRW a 30-month extension to draw new construction plans for the plant and housing plans for the workers who would build it.
The state also added the stipulation that DKRW conduct two public meetings annually.
The company held the first of those in Medicine Bow last month. About 40 people attended, according to those present. Cline and DKRW attorney Mary Throne gave an update on the project and answered questions from the crowd.
The plant will likely take four to five years to build, though construction wouldn’t likely start for a year, Cline said Wednesday. That makes it hard to secure an American engineering and construction firm at a time when industrial-scale development is occurring at a fast pace in North Dakota and the Gulf of Mexico.
Firms don’t like to commit to labor rates over a five- to six-year period in that environment, Cline said.
The company is also seeking foreign construction companies.
Cline likened the situation to a “chicken and egg” proposition. Lenders want to know about a deal with the construction firm. Construction firms want to know about the terms of the loan with lenders.
“There is a little bit of trying to get everyone comfortable with each other at the same time,” he said.