On Deck. Fort Union plant nears completion in Gillette, Wyo. (Photo courtesy of KFX Corportation)

Officials of Denver-based KFx Inc. say the nearly completed plant being constructed at the Fort Union Mine in Wyoming’s Powder River Basin should be- gin production this year. It will process 750,000 tons per year of low-rank coal using KFx’s patented process with 450°F to 500°F heat and 450 to 500-psi pressure. The "K-Fuel" product has 30 to 40% more Btu per lb than the parent coal. It also has 70% less mercury and 30% less sulfur and nitrogen.

In late September and early October, KFx officials announced plans to construct a 4-million-tpy K-Fuel plant at the Buckskin Mining Co.’s coal mine near Gillette, Wyo. A week later, the company announced plans for construction and operation of an 8-million-tpy K-Fuel plant at Arch Coal Inc.’s Coal Creek Mine, also in Wyoming’s Powder River Basin. The company aims to have the plants in operation by the end of 2008, and 50 million tpy altogether by 2010.

Founded in 1984, the firm began building its first commercial demonstration plant in 1995. For reasons unrelated to the technology, the plant was closed before it could be commercially proven. The failure forced a reassessment, says Robert Hanfling, KFx president and COO. The company decided to lease proven Mark IV gasification technology from South Africa-based Lurgi Sasol and modified it to produce beneficiated coal.

"It lets us take the process risk out of the equation," he says. The process boosts the thermal value of standard low-sulfur subbituminous Powder River Basin coal from the 8,400-8,800-Btu range to 10,500 or 11,000 Btu. The company estimates it will cost $15 to $20 per ton to produce K-Fuel and has claimed it would sell for between $35 and $50 per ton. Current futures prices for standard coal from the region are $16 to $20 per ton, according to Platt’s, like ENR, a division of the McGraw-Hill Cos.

Acting as general contractor, KFx had Lurgi Sasol engineer the process and ForeRunner Corp., Lakewood, Colo., engineer the non-process portion of the 750,000-tpy. Construction of the $65-million project began in November 2004 and is nearing completion, with TIC-The Industrial Co., Steamboat Springs, Colo., as mechanical/piping contractor and Gillette-based Hladky Construction Inc. as civil contractor.

Engineers or contractors have not been announced for the new plants. Hanfling says construction costs of the larger plant should be about $400 million.