Coal-to-natural gas plant announced

By Tom Stundza -- Purchasing, 7/25/2007

The plan is to produce up to 70 billion cubic feet of pipeline-quality natural gas each year from more than 3.5 million tons of coal sourced in the Midwest. St. Louis-based coal producer Peabody Energy and Houston-based oil and gas supplier ConocoPhillips have agreed to develop this commercial-scale coal-to-substitute natural gas facility.

"The energy value in Peabody's vast coal reserve base exceeds the energy in the oil or gas reserves in the continental U.S., offering strategic advantages for coal-to-gas projects and other Btu conversion projects,” says a statement by Gregory Boyce, Peabody's president and CEO.

Peabody and ConocoPhillips expect the project's preliminary design and economic assessment to be complete in early 2008. “The project, as currently envisioned would be designed to deliver over 1.5 trillion cubic feet of substitute natural gas (SNG) in its first 30 years of operation from proven (U.S.) coal reserves,” says Jim Mulva, ConocoPhillips' chairman and CEO, in a statement.