US$2bn DOE loan to Lake Charles Methanol

THE US Department of Energy (DOE) has offered guarantee loans of US$2bn to Lake Charles Methanol (LCM), which plans to build a plant to produce methanol from petroleum coke and capture carbon emissions.

The US$3.8bn plant will be the first methanol plant to use carbon capture technology and the first in the US to use petroleum coke as a feedstock. The conditional loan will be the first that the DOE has offered under its Advanced Fossil Energy Project, which was set up under President Barack Obama’s Climate Action Plan to support “innovative advanced fossil energy projects that avoid, reduce, or sequester greenhouse gases”.

LCM’s plant will use ultra-clean gasification technology developed by GE to produce syngas from coke, which will then be converted into methanol, hydrogen, sulphuric acid, argon, krypton and xenon. Up to 90% of the CO₂ produced during the process will be captured, around 4–5m t/y. The captured CO₂ will be purified, compressed and sold to Denbury Onshore for use in enhanced oil recovery on the Gulf Coast. The company currently produces 34,000 bbl/d.

LCM says that the plant will reduce emissions of air pollutants, including nitrous oxides (NO_X) and sulphur dioxide (SO₂) by 99% compared to other uses of petroleum coke, which is often just burned for energy, as well as turning impurities into other chemicals. Virtually no solid waste will be produced.

The plant is expected to create 1,000 construction jobs and support 500 permanent jobs once operational. Fluor has been awarded the turnkey engineering, procurement and construction (EPC) contract for the plant, which is due for completion in 2020. LCM expects the plant to be operational for 30 years.

“This conditional commitment represents a major milestone in the Department’s efforts to scale up carbon capture utilisation and sequestration and continue American leadership in advanced fossil energy technologies,” said US secretary of energy Ernest Moniz.