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Peabody Energy Evaluates Sites in Kentucky for $3 Billion Coal-To-Gas Facility

By wmadministrator

Peabody Energy has narrowed its focus exclusively to Kentucky as it evaluates sites for a $3 billion synthetic natural gas facility that will be one of the largest commercial coal-to-natural gas facilities in the United States.

The announcement by Peabody subsidiary Kentucky Syngas, LLC follows the preliminary approval by the Kentucky Economic Development Finance Authority of up to $250 million in incentives. The incentives are part of the state’s new Incentives for Energy Independence Act, legislation that gives energy companies an incentive to build plants in Kentucky that will convert coal, corn and other products into clean fuels.

Kentucky Syngas will convert coal and petroleum coke into substitute natural gas, annually producing approximately 50 to 70 billion cubic feet of pipeline-quality synthetic natural gas from more than 2.5 million tons of Kentucky-sourced coal.
The search for a Kentucky site has been narrowed to a five-county region: Henderson, Union, Ohio, Webster and Muhlenberg counties. The final location will be determined following the completion of a feasibility study next year.

An economic impact study performed by the Cabinet for Economic Development’s Office of Research and Information Technology indicates the construction phase alone would have a tremendous effect on Kentucky’s economy: The potential one-time direct economic impact of the anticipated 1,200 construction jobs would be approximately $229.1 million.

An estimated 175 direct jobs would be created upon completion of the project, with an additional 375 jobs to be realized related to coal mining operations in the production of coal feedstock.

Peabody Energy ranks as the world’s largest private-sector coal company, with 2006 sales of 248 million tons of coal and $5.3 billion in revenue. Its coal products fuel approximately 10 percent of all U.S. electricity and more than 2 percent of worldwide electricity.