ST. LOUIS, Nov 02, 2005 /PRNewswire-FirstCall via COMTEX News Network/ -- Peabody Energy today announced
that it has entered into a memorandum of understanding with ArcLight Capital
Partners, LLC to advance project development of a commercial-scale coal
gasification project in Illinois that would transform coal into pipeline-
quality synthetic natural gas. The initial project would be designed with
ConocoPhillips "E-Gas(TM)" Technology, featuring an oxygen-blown gasification
system. ConocoPhillips and Fluor have begun preliminary engineering design
work for the project.
The plant would be one of the largest coal-to-natural-gas plants in the
United States and would be sited in Illinois. Peabody would develop a coal
mine to fuel the plant using its Illinois Basin reserves, and ArcLight,
through an affiliate, would contribute its Illinois-related coal-to-natural-
gas development assets.
The project would require at least 3 million tons of coal per year to fuel
two gasifier trains that could produce more than 35 billion cubic feet of
synthetic natural gas.
"This partnership combines the strength of industry leaders in advancing a
major Btu Conversion opportunity that provides an alternative to scarce U.S.
natural gas," said Gregory H. Boyce, Peabody President and Chief Executive
Officer Elect. "Btu Conversion technologies will significantly expand the
market for coal and more fully utilize America's 200-year supply to improve
Gasification has been used for the refining, chemical and power industries
for 50 years. The "E-Gas" process would combine a coal-water mixture with
oxygen and steam to produce a synthesis gas (syngas), which is further
upgraded at the site to produce pipeline-quality natural gas.
"The agreement with Peabody represents a major step in bringing to reality
the development effort initiated by ArcLight several years ago," said Robb
Turner, Senior Partner at ArcLight. "We look forward to a successful
partnership with Peabody that will result in an environmentally-friendly coal-
Peabody Energy (NYSE: BTU) is the world's largest private-sector coal
company, with 2004 sales of 227 million tons of coal and $3.6 billion in
revenues. Its coal products fuel more than 10 percent of all U.S. electricity
and 3 percent of worldwide electricity.
ArcLight Capital Partners, LLC is one of the world's leading energy
infrastructure investing firms with more than $2.5 billion under management.
ArcLight invests throughout the energy industry value chain in hard assets
that produce high current income and capital appreciation. More information
about ArcLight can be found at www.arclightcapital.com.
SOURCE Peabody Energy
Vic Svec of Peabody Energy, +1-314-342-7768