Eastman Chemical to sell Texas gasification project to ZEEP

21 January 2011 14:04  [Source: ICIS news]

TORONTO (ICIS)--Eastman Chemical has agreed to sell its Texas petroleum coke gasification project to Zero Emission Energy Plants (ZEEP) for an undisclosed sum, the buyer said on Friday.

Eastman announced the project at Beaumont near Houston in 2007, valuing it at around $1.6bn (€1.2bn) at the time.

But in late 2009 Eastman abandoned the project, citing high capital costs, uncertain US regulations and the likely persistence of a smaller spread between prices for natural gas and oil and petroleum coke.

However, ZEEP CEO Ron Oligney said his firm would continue work on the project, which will convert petroleum coke into hydrogen and pipeline quality carbon dioxide (CO2).

"This site is uniquely suited for a gasification facility that converts waste petroleum coke into clean energy products," Oligney said.

"The primary offtake will be hydrogen, an important clean energy feedstock for transportation fuels, fertilizers and chemicals,” he said.

The CO2 from the facility would be captured and used to boost oil production in fields near Beaumont and through an existing CO2 pipeline network, he added.

The project would employ 1,500 workers during construction and create about 250 permanent jobs after completion, Oligney said.

Houston-based ZEEP is described as a private company focused on the development of gasification facilities to convert coal, petroleum coke and biomass into energy products such as syngas, hydrogen, carbon monoxide (CO), CO2, methanol, gasoline and power.

($1= €0.74)

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By: Stefan Baumgarten
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