Skip to main content
You have permission to edit this article.
DKRW prioritizes private funding for coal-to-gas plant

DKRW prioritizes private funding for coal-to-gas plant

  • Updated
  • 0

The company seeking to build what could become the first American coal-to-gas plant will seek private funding before dipping into public funds.

DKRW Advanced Fuels, which is planning a coal-gasification plant near Medicine Bow, will gauge its international debt financing portfolio and then possibly return to the state and Carbon County for additional help, said Bob Kelly, executive chairman for the company.

DKRW signed a key engineering and construction deal with Sinopec Engineering Group on Friday. The company is the engineering arm of Sinopec group, a giant, Chinese state-owned oil company, and has coal-gasification plant construction experience.

Securing a construction firm was a needed step, Kelly said, before the company could think about how to finance the plant.

“You need [a contract] to get into the financing market,” he said. “Now we’re out and have a team working in the international market.”

Kelly said DKRW will determine what private financing it can secure for the project. Based on the quality of the debt, which Kelly said will surpass $1 billion, the company may not seek additional government help. Kelly said that having simpler debt would be advantageous to multiple lenders.

“We’re putting a big bank package together and we’ll see how that works,” he said.

The company has approached both state officials and Carbon County commissioners for help. A package discussed with the state would feature a $300 million loan from the state through industrial development bonds.

Any plan proposed to the state’s Wyoming Business Council would be vetted by the Idaho National Laboratory. Carbon County commissioners approved in January a DKRW request to make $245 million in company-issued bonds tax exempt.

Kelly said both measures were only “preliminary” and may not be executed.

“We’re going to focus on major commercial and equity financing, then make a determination of whether we want to put more Wyoming opportunities in it,” he said.

The plant would be the first of its kind in Wyoming. A similar plant, planned by New York City-based TransGas Development Systems, is under construction in West Virginia.

The plant would use technology developed by General Electric to convert coal to gasoline. The project would be located at the site of the 180-million-ton Carbon Basin coal reserve, owned by Arch Energy.

Kelly said the technology could produce two barrels of gas for each ton of coal, meaning the plant could produce about 360 million barrels of gasoline from the coal reserve alone.

“We’re creating a new environmentally friendly market for coal,” he said.

The DKRW plant would create about 2,300 construction jobs and 400 full-time jobs, Kelly said. The company hopes to secure financing and begin construction by early 2013, with completion and production slated by 2016.

Kelly said Friday’s development — signing a construction contract — will provide momentum for the project.

“It’s a huge step,” Kelly said. “We got a huge part [of the project] out of the way.”

Reach energy reporter Adam Voge at 307-266-0561, or at

Read his blog at or follow him on Twitter @vogeCST.


The business news you need

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Related to this story

Get up-to-the-minute news sent straight to your device.


News Alerts

Breaking News