Lima Energy given deadline to file more gasification project data

Lima Energy Co., which is trying to revive a long-dormant gasification power project in Ohio, has been given a June 29 deadline by the Ohio Power Siting Board to submit a report on various aspects of the project.

The board approved a siting certificate for the project in 2002, with a brief period of project construction later on. Lima Energy, once controlled by Global Energy, is now an affiliate of USA Synthetic Fuel. It is asking the board for an extended deadline to build this project, avoiding the time-consuming need to get another site certificate. On Feb. 6, Lima Energy filed a motion requesting that the board extend its certificate to construct the proposed facility for 30 months, until Sept. 1, 2014.

In a May 4 order, a board administrative law judge said the company needs to submit various answers to the board by June 29. That includes:

  • A detailed explanation of the status of the electric grid interconnection for the proposed project, including interconnection studies that have been performed and the validity of those interconnection studies, any interconnection studies to be performed and needed system upgrades.
  • A detailed description of the initial site preparation activities that have been completed and the activities to be undertaken prior to construction activities.
  • A complete list of the federal, state, and local permits necessary to construct the proposed facility, along with a discussion of the status of each permit, related compliance requirements and the date when the permit will expire, expired, or when Lima Energy expects to obtain the permit.
  • In its motion to extend its certificate, Lima Energy stated that the facility may have to be reconfigured. The board wants a thorough discussion of the extent to which and why Lima Energy makes this statement including an explanation of how the proposed facility would be reconfigured.

This is an integrated gasification combined cycle (IGCC) power project to be built in Lima, Ohio. The board had issued a Jan. 25 order that said that since this project had not been in continuous construction, Lima Energy needed to demonstrate by Feb. 8 why the 2002 approval shouldn’t be rescinded. That order was the first entry in the docket for this case since 2005.

Lima Energy told the board in the Feb. 6 filing that due to the intervening “evolution” in the energy markets, the facility may have to be reconfigured from the version that was approved by the board in 2004 in an amendment of the original 2002 approval. Lima Energy noted how original project developer Global Energy began building the plant in 2004, then halted construction due to lack of financing. The project has since been taken over by USA Synthetic Fuel, which is trying to raise money for a new construction start.

USA Synthetic Fuel, which is publicly traded, has said in recent SEC filings that it not only wants to build the original IGCC power project at Lima, but also two other projects at the site, called Gas 1 and Gas 2, that would create synthetic natural gas for sale in the gas pipeline market. The Lima facility, with an estimated cost of $2.15bn, would gasify mainly petroleum coke, with coal as a backup feedstock.

The project costs for the three phases of the Lima Energy Project are expected to be about $497m (Gas 1), $1.02bn (Gas 2) and $627.3m(Combined Cycle Gas turbine), said USA Synthetic Fuel’s April 20 Form 10-K annual report. Gas 1 is designed to produce 2.4 million barrels of oil equivalent (BOE)/yr of SNG; Gas 2 is designed to produce 5.6 million BOE/yr of SNG; and CCGT is designed to have a capacity of 516 MW.  In addition, the project will capture 100% of the CO2 produced during the SNG manufacture.

USA Synthetic Fuel is headed by Harry Graves, who had founded Global Energy. A vice president with USA Synthetic Fuel is Mike Musulin, the former president of the Kentucky Coal Association. Musulin joined Global Energy a few years ago at a time when it was pursuing a now-defunct coal gasification project in eastern Kentucky.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.